Where a joint election is made and the transferor is also ceasing to trade, FA12/S29(2) provides that the cessation provision at FA12/S26(6) do not apply. FA12/S26(6) would otherwise bring the remaining balance of the reserves into charge in the transferor.

In the year of transfer the receipt is apportioned between the transferor and the transferee on a time basis. Any remaining receipts in years subsequent to the year of transfer are treated as receipts of the transferee and the rules in FA12/S26-29 apply to the transferee as they would have applied to the transferor had the transfer not taken place.


The example is based on the following scenario;

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