The relevant liabilities restriction was introduced to counteract avoidance as explained in CTM06250. However, the restriction applies to all transfers of trade which fall under CTA10/S940A. Note in particular that there is no exclusion in CTA10/S945 (2) for liabilities connected with transfers within a stable group of companies, even though all third party creditors may be paid in full. This means that where a predecessor has an outstanding debt to a fellow group company at the time of the transfer, which is not transferred with the trade, that debt will count as a liability for the purposes of the restriction.
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