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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Businesses: demergers: overview

Where a business is split (demerged) into two separate parts then the cessation rules normally apply to the original business (see BIM82410) and the commencement rules to the new businesses (see BIM82410). This is because a person cannot succeed to part of a business.

In some circumstances one of the businesses formed after the demerger may be treated as a continuation of the original business- for example, where one business has retained large numbers of customers and assets (see BIM82420).

See Statement of Practice SP 9/86, which is reproduced at BIM82435.