13[F1(1)Sub-paragraphs (2) to (4) apply if—U.K.
(a)the transferor ceased to carry on a trade by virtue of a relevant transfer taking effect, and
(b)on the taking effect of that transfer, the transferee began to carry on the trade.
This sub-paragraph is to be read with sub-paragraph (8).]
(2)Subject to sub-paragraphs (3) and (4), in a case falling within sub-paragraph (1)—
(a)there are to be made to or on the transferee in accordance with [F2the Capital Allowances Act] all such allowances and charges as would, if the transferor had continued to carry on the trade, have fallen to be made to or on the transferor, and
(b)the amount of any such allowance or charge is to be computed as if—
(i)the transferee had been carrying on the trade since the transferor began to do so, and
(ii)everything done to or by the transferor had been done to or by the transferee (but so that the relevant transfer itself, so far as it relates to any assets in use for the purpose of the trade, shall not be treated as giving rise to any such allowance or charge).
(3)For the purposes of the Corporation Tax Acts, only such amounts (if any) as may be specified in or determined in accordance with an order made by the Secretary of State by statutory instrument are to be allocated to the transferee in respect of expenditure by reference to which capital allowances may be made by virtue of sub-paragraph (2) in relation to anything to which the transfer relates.
(4)Sub-paragraph (2) is to affect the amounts falling to be taken into account in relation to the transferor as expenditure by reference to which capital allowances may be made only so far as necessary to give effect to a reduction of any such amount by a sum equal to so much of that amount as is allocated to the transferee as mentioned in sub-paragraph (3).
(5)An order under sub-paragraph (3) may include provision—
(a)for a determination to be made by the Secretary of State in a manner described in the order,
(b)for a determination to be made by reference to factors so described or to the opinion of a person so described, and
(c)for a determination to be capable of being modified (on one or more occasions) in a manner and in circumstances so described.
(6)The Treasury’s consent is required for the making or modification of a determination of any such amount as is mentioned in sub-paragraph (3).
(7)The transferee’s consent is also required for such a modification after the relevant transfer takes effect.
(8)In determining whether sub-paragraph (1) has effect in relation to a relevant transfer in a case where—
(a)the transferor continues to carry on any trade or part of a trade after the transfer takes effect, or
(b)the transferee was carrying on any trade before the transfer takes effect,
the trade or part of a trade which is continued, or was being carried on, shall for the purposes of that sub-paragraph be treated in relation to any trade or part of a trade which is transferred by virtue of the transfer as a separate trade and shall accordingly be disregarded.
(9)If there is a determination or a modification of a determination for any purposes of this paragraph, all necessary adjustments—
(a)must be made by making assessments or by repayment or discharge of tax, and
(b)must be made despite any limitation on the time within which assessments may be made.
Textual Amendments
F1Sch. 26 para. 13(1) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 473(3) (with Sch. 2 Pts. 1, 2)