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HMRC internal manual

Business Income Manual

Computing the amount to assess: business changes: succession and changes in ownership: what is a succession?

The same trade may continue in existence even if there is a change in the people who carry it on. The most obvious example is where a trade is carried on in partnership and the partners change. However it can also happen where predecessor and successor are at arm’s length, most commonly where a business (including all its assets and goodwill) is sold as a going concern.

A change in the persons carrying on a trade is normally referred to as ‘succession’. When there is a succession, one trade ceases and another commences, and each trade is taxed accordingly. This situation is to be distinguished from that where the same trade continues and there is some continuity in ownership.