Corporation Tax Act 2010 section 947

Rules for determining "A"

Section 947 sets out the rules for valuing and identifying the assets and consideration that make up "A" in the formula used in section 945 to determine whether a predecessor company has retained more liabilities than assets after transferring a trade.

• Assets previously apportioned to a successor company under an earlier application of the same Chapter must be excluded from the calculation of "A".
• Each asset is valued at the price it could reasonably be expected to fetch on an open market sale immediately before the trade transfer takes place.
• Where the predecessor holds relevant loan stock not included in "L" and that stock is secured on a retained asset, the value of that asset is reduced by the amount of the loan stock liability.
• If the successor assumes a liability of the predecessor as part of the transfer, that assumption of liability does not count as consideration given by the successor.