Finance Act, 1984
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Successions, etc., to trade. |
56.—(1) Subject to subsection (3), this section applies to a relevant disposal of a trade. | |
(2) There shall be a relevant disposal of a trade where— | ||
(a) a trade carried on by one company (hereafter in this section referred to as “the predecessor”) is transferred to another company (hereafter in this section referred to as “the successor”) and section 20 of the Corporation Tax Act, 1976 , has effect in relation to the transfer, or | ||
(b) a trade carried on by an individual or by persons in partnership (hereafter in this section referred to as “the predecessor”) is transferred to a company (hereafter in this section referred to as “the successor”) and at the date of the transfer not less than three-quarters of the ordinary share capital of the company is held by that individual or those persons, as the case may be, or | ||
(c) a person (hereafter in this section referred to as “the successor”) succeeds to a trade on the death of a deceased person (hereafter in this section referred to as “the predecessor”) who carried on that trade, or | ||
(d) a trade carried on by an individual (hereafter in this section referred to as “the predecessor”) is disposed of in his lifetime to a child of his (hereafter in this section referred to as “the successor”). | ||
(3) This section shall not apply unless— | ||
(a) in a case where subsection (2) (a) or (2) (b) applies, the trading stock of the trade is transferred at cost or market value, and | ||
(b) in any case, the successor is resident in the State (and, if he is an individual, not resident elsewhere) and is within the charge to tax under Case I of Schedule D in respect of the trade. | ||
(4) Where there is a relevant disposal of a trade and the predecessor (or, where subsection (2) (c) applies, the personal representatives of the predecessor) and the successor so elect, section 50 or 52 , as the case may be, shall not apply to the accounting period of the predecessor which ends with or includes the date of the relevant disposal but, for the purposes of section 50 or 52 , as the case may be, the successor shall be treated as if he were the person who had carried on the trade since the predecessor began to do so (or was treated by virtue of a previous application of this section as having begun to do so). | ||
(5) An election under subsection (4) shall be made by notice in writing signed by both the predecessor (or where subsection (2) (c) applies, the personal representatives of the predecessor) and the successor and sent to the inspector not later than two years after the date of the relevant disposal. | ||
(6) For the purposes of subsection (2) (c), a person shall be treated as succeeding on a death if he so succeeds— | ||
(a) under a will or an intestacy (including a partial intestacy), | ||
(b) by virtue of any provision of Part IX of the Succession Act, 1965 , | ||
(c) by survivorship, in the case of a joint tenancy, or | ||
(d) as remainderman on the death of a tenant for life. | ||
(7) In subsection (2) (d) “child” has the same meaning as in section 27 (inserted by the Capital Gains Tax (Amendment) Act, 1978 ) of the Capital Gains Tax Act, 1975 . |