Section 50 | Cessation of trades

(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 1A company starts or ceases to be within the charge to corporation tax in respect of a trade.

Case 2There 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 3There is a change in the persons carrying on a trade and—

(a)immediately before the change, the trade is carried on by persons who include a company, and

(b)after the change, no company that carried on the trade in partnership immediately before the change continues to carry it on in partnership.

Case 4There is a change in the persons carrying on a trade and—

(a)immediately before the change, no company carries on the trade in partnership, and

(b)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 1A husband and wife are treated as the same person.

Rule 2Individuals who are civil partners of each other are treated as the same person.

Rule 3A husband or wife is treated as the same person as—

(a)a company of which either of them has control, or

(b)a company of which both have control.

Rule 4An individual's civil partner is treated as the same person as—

(a)a company of which either of the civil partners has control, or

(b)a company of which both have control.

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