BUSINESS OR COMPANY ACQUISTION?
> BUSINESS ACQUISTN; BUSINESSS OR ASSETS?
> BUSINESS;
> A business acq is one where the buyer/s acquire the assets that makes up the business.
> The contract is betwn owner of bus and the buyer (may be an individual, p/s or co.)
> The business is purchased as a going concern with all assets, inclu. goodwill.
> No change in ownership of business.
> Vat not chargeable
> transfer more likely caught by TUPE Reg 1981 of which d effect will be deemed transfer
of contracts of employees employed immediately b4 transfer to buyer.
> co. receives proceeds of sale
> TRANSFER OF BUSINESS IN RETURN 4 SHARES
> 2 potentially available reliefs; CGT and Income Tax.
> Cgt; rolling gains into shares;
S. 162 of taxatn of chargeable gains act 1992 enables chargeable gains on disposals of business
to be rolled into price at which shares are taken to av been acquired,
postponing any liablity to cgt until shares are disposed of.
>for relief to operate, all assets of business must b transferd to co.
> Income tax; carryn forward unutilised trading losses;
S. 386 of income and corporation taxes act 1988 allows former owners of business to carry forward
any unutilised tradn losses against income received from co. where
business is transferred to co. mainly or wholly in return 4 shares(at least 80% of consideration must be in shares) BUT
if not wholly of mainly in return 4 shares, or is assets only, bcause of business stopn, no tradin losses can b carried forwrd
> ASSETS;
> buyer limits transaction to purchase of certain assets of business.
> transaction unlikely to be classed as sale of going concern
> m ...