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HMRC internal manual

Business Income Manual

Stock: valuation on discontinuance of business: purchaser's cost value

S169 Corporation Tax Act 2009 and S180 Income Tax (Trading and Other Income) Act 2005

The cost of the stock to the purchaser that is to be brought into account in computing their trading profits for tax purposes has to be the same as the value of the trading stock brought into account by the vendor.

Any cost incurred by the purchaser in valuing the stock for the purposes of the transfer should be treated as an additional cost of the trading stock.

This `tax cost’ may not agree with the cost shown in the purchaser’s accounts. Tax computation adjustments to the accounts profit or loss may be necessary, see BIM33700 onwards.