The Housing and Regeneration Transfer Schemes (Tax Consequences) Regulations 2015

Corporation tax: transfers of trading stock

4.—(1) This regulation applies if there is a transfer of trading stock of the transferor.

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

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

(b) the consideration given, or the expenditure incurred, by the transferee for the acquisition of the stock (whether acquired as trading stock or not).

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

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

(b) 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.