Businesses: mergers and demergers: overview
Where two businesses, initially under different ownership, are brought together under common ownership there are a number of possibilities as to how these arrangements will be regarded for tax purposes:
- the previous businesses cease and a new business commences (see BIM82410),
- the previous businesses continue as a merged joint business (see BIM82415),
- one business continues and the other(s) ceases (see BIM82420).
The outcome which applies will be a question of fact.
The tax treatment of these outcomes follows general taxation principles, as confirmed in Statement of Practice 9/86 (see BIM82435 for the text).