Corporation Tax Act 2009 section 284

Transfer of rights if transferee does not carry on UK property business

Section 284 deals with the tax treatment when a company that has permanently ceased its UK property business sells the right to receive future income from that business to someone who does not then carry on the business themselves.

• When a company permanently ceases a UK property business and sells the right to receive future sums from that business, and the buyer does not carry on the business, the selling company is treated as receiving a post-cessation receipt.
• If the sale is at arm's length, the post-cessation receipt equals the actual consideration received for the transfer of rights.
• If the sale is not at arm's length, the post-cessation receipt is instead the value the rights would have had between independent parties dealing at arm's length.
• Any sums that the buyer subsequently receives under the transferred rights are not treated as post-cessation receipts, preventing the same income from being taxed twice.