Section 50 — Corporation Tax Act 2010: Cessation of trades

Cessation of trades 50 1 For the purposes of section 48(3)(c) a trade is to be treated as ceased, and a new trade as started, in any of the following cases— Case 1 A company starts or ceases to be within the charge to corporation tax in respect of a trade. Case 2 There is a change in the persons carrying on a trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on. Case 3 There is a change in the persons carrying on a trade and— immediately before the change, the trade is carried on by persons who include a company, and after the change, no company that carried on the trade in partnership immediately before the change continues to carry it on in partnership. Case 4 There is a change in the persons carrying on a trade and— immediately before the change, no company carries on the trade in partnership, and immediately after the change, the trade is carried on in partnership by persons who include a company.

2 Subsection (1) is subject to subsections (3) and (4).

3 A trade is not to be treated as ceased if the change in the persons carrying on the trade is a transfer to which Chapter 1 of Part 22 applies (transfers of trade without a change of ownership).

4 In determining if there is a change in the persons carrying on a trade, subsection (1) is subject to the following rules— Rule 1 A husband and wife are treated as the same person. Rule 2 Individuals who are civil partners of each other are treated as the same person. Rule 3 A husband or wife is treated as the same person as—

a company of which either of them has control, or a company of which both have control. Rule 4 An individual's civil partner is treated as the same person as—

a company of which either of the civil partners has control, or a company of which both have control.

5 In subsection (4) “ control ” has the same meaning as in section 450.