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Conran and another v HMRC

Valuation of intangibles and classification of distribution on a business transfer

In Conran and another v HMRC [2022] UKFTT 39 (TC) (3 February 2022) the FTT found that the market value of assets transferred between group entities had been £1 (and not £8.25m) and therefore the capital gains tax that had been paid by the ultimate individual owner was not payable; but also that the buying group company could not obtain intangibles relief on the consideration paid. The FTT also found that the consideration paid could not be treated as a distribution.

This concerned the transfer of a business by an LLP (JCO) to a limited company (JCV) for £8.25m. The business consisted of the design manufacture and marketing of optical products. The transfer was effectively the incorporation of the business. Mr Jasper Conran (JC) the majority partner in JCO with a 99.9% share brought the proceeds...

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