Section 849A | Disincorporation relief: transfer values for post-FA 2002 goodwill

(1)This section applies where—

(a)a company transfers its business to some or all of the shareholders of the company, and

(b)a claim for disincorporation relief in respect of the transfer has been made under section 58 of the Finance Act 2013.

(2)If section 735 applies to the transfer of the goodwill of the business, the transfer is treated for the purposes of this Part as being at the lower of—

(a)the tax written-down value of the goodwill, and

(b)its market value.

(3)If section 736 applies to the transfer of the goodwill of the business, the transfer is treated for the purposes of this Part as being at the lower of—

(a)the cost of the goodwill, and

(b)its market value.

(4)If section 738 applies to the transfer of the goodwill of the business, the proceeds of realisation of the goodwill are treated for the purposes of this Part as being nil.

(5)In subsection (2)(a) the reference to the tax written-down value of the goodwill is to its tax written-down value immediately before the transfer.

(6)In subsection (3)(a) “the cost of the goodwill” means the cost recognised for tax purposes (determined in accordance with section 736(6) and (7)).

(7)In this section market value has the meaning given in section 845(5).