Localism Act 2011

Transfers of trading stock U.K.

4 (1) This paragraph applies if— U.K.

(a) under a relevant transfer, trading stock of the transferor is transferred to the transferee,

(b) immediately after the transfer takes effect, the stock is to be treated as trading stock of the transferee, and

(c) paragraph 3 does not apply in relation to the transfer.

(2) Sub-paragraphs (3) and (4) have effect in calculating for any corporation tax purpose both—

(a) the profits of the trade in relation to which the stock is trading stock immediately before the transfer takes effect (“the transferor's trade”), and

(b) the profits of the trade in relation to which it is to be treated as trading stock (“the transferee's trade”).

(3) The stock is to be treated as having been—

(a) disposed of by the transferor in the course of the transferor's trade,

(b) acquired by the transferee in the course of the transferee's trade, and

(c) subject to that, disposed of and acquired when the transfer takes effect.

(4) The stock is to be valued as if the disposal and acquisition had been for a consideration which in relation to the transferor would have resulted in neither a profit nor a loss being brought into account in respect of the disposal in the accounting period of the transferor which ends with, or is current at, the time when the transfer takes effect.

(5) In this paragraph “trading stock” has the meaning given by section 163 of CTA 2009.

Commencement Information

I1 Sch. 24 in force for specified purposes at Royal Assent see s. 240(5)(o)

I2 Sch. 24 para. 4 in force at 30.3.2012 for E.W. by S.I. 2012/628, art. 3(b)