Consider the following scenario involving two companies A Ltd and B Ltd. The trade of A Ltd is being transferred to B Ltd. This trade represents a collection of assets. If A Ltd has no other trading activity this will result in the cessation of A Ltd’s trade.
This will bring to an end an accounting period within A Ltd. In addition if B Ltd has no other activity before the trade is transferred B Ltd will start trading for the first time and the commencement provisions will apply.
So B Ltd will start a brand new accounting period for corporation tax purposes. The transfer of the trade will result in balancing adjustments being made on the company’s plant and machinery and industrial buildings.
If A Ltd controls B Ltd ie it owns...
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Consider the following scenario involving two companies A Ltd and B Ltd. The trade of A Ltd is being transferred to B Ltd. This trade represents a collection of assets. If A Ltd has no other trading activity this will result in the cessation of A Ltd’s trade.
This will bring to an end an accounting period within A Ltd. In addition if B Ltd has no other activity before the trade is transferred B Ltd will start trading for the first time and the commencement provisions will apply.
So B Ltd will start a brand new accounting period for corporation tax purposes. The transfer of the trade will result in balancing adjustments being made on the company’s plant and machinery and industrial buildings.
If A Ltd controls B Ltd ie it owns...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
