Business Asset Taper Relief

Business Asset Taper Relief

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Company A has its entire share capital acquired by Company B and B becomes the holding company.

Company B is being disposed of but in order to calculate the business asset taper relief do I take the acquisition date for shares of Company A or Company B or the date of transfer?

Are the transactions treated seperately?

I cannot find anything definitive to confirm either and the tax office have told me this is a grey area.

Can anyone provide a clue?
James Stratford

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By User deleted
08th Jun 2006 15:13

TCGA s127 probably gives the answer
Assuming the acquisition of company A by company B fell within the conventional 'share for share' reconstruction provisions, then TCGA s.127 says that the shares of company B are treated as the same asset as the shares of company A, and that there is no separate acquisition of the shares of company B.
There is therefore no specific reference in SchA1 to this problem in the contect of Taper Relief

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By AnonymousUser
15th Jun 2006 14:58

No material difference...
If all other conditions are satisfied, BATR is claimable and it is simply a matter of the proportion of the gain qualifying. If the business was carried on right up to exchange of unconditional contracts, the entire gain is eligible and what the purchaser does subsequently with the premises, staff,etc. is irrelevant. Some might argue that completion date is what should be looked at so that a cessation of business say six weeks prior results in a tiny time -apportioned gain losing BATR. I do not subscribe to this contention.
The presence of planning consent at sale has no bearing on the situation because it does not destroy the "business asset"
classification in the circumstances outlined.

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