Corporation Tax Act 2010 section 951

Part of trade treated as separate trade

Section 951 deals with how parts of a trade are treated when trade activities are transferred between companies, ensuring that even where the transferred activities become absorbed into a larger trade, they are treated as a separate trade for the purposes of the transfer rules.

• Where a company ceases a trade and another company absorbs those activities into its own existing trade, the absorbed activities are treated as a separate trade for the purposes of the transfer of trade rules
• Where a company ceases only part of a trade and another company picks up those activities, the part given up is likewise treated as if it had been a separate trade in the hands of the transferor
• When part of a trade is treated as separate, only the assets and liabilities specifically apportioned to that part (under section 952) are taken into account when determining whether the transferor retained more liabilities than assets
• Where losses from the transferred trade are carried forward to the transferee under the loss relief provisions, those provisions apply as if the transferee were carrying on the absorbed activities as a separate trade