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HMRC internal manual

Business Income Manual

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).