PM135100 - Mergers and demergers: overview

Where two businesses, initially under different ownership, are brought together under common ownership there are a number of possibilities as to how these arrangements will be regarded for tax purposes:

• the previous businesses cease and a new business commences (see PM135200),
• the previous businesses continue as a merged joint business (see PM135300)

• one business continues and the other(s) ceases (see PM135400).The outcome which applies will be a question of fact.

  The tax treatment of these outcomes follows general taxation principles, as confirmed in Statement of Practice 9/86 (see PM135700 for the text).