Section 334E | Effect of election where predecessor and successor are connected persons

(1)This section applies if—

(a)a person carrying on a property business enters the cash basis for a tax year,

(b)the person is the successor for the purposes of section 266 of CAA 2001, and

(c)as a result of an election under that section, relevant plant or machinery is treated as sold by the predecessor to the successor at any time during the tax year.

(2)The provisions of this Chapter have effect in relation to the successor as if everything done to or by the predecessor had been done to or by the successor.

(3)Any expenditure actually incurred by the successor on acquiring the relevant plant or machinery is to be ignored for the purposes of calculating the profits of the property business for the tax year.

(4)In this section—

“the predecessor” has the same meaning as in section 266 of CAA 2001, and

“relevant plant or machinery” has the same meaning as in section 267 of that Act.