Commentary on Sections Overview Overview Section 310: Acquisition of business: receipts from transferor’s UK property business
1258.This section taxes certain receipts when a continuing UK property business is transferred from one person to another along with the right to receive future business sums to which the transferor is entitled. It is based on sections 21B and 106 of ICTA.
1259.Subsection (1) sets out the circumstances in which the section applies and states the three conditions necessary for it to apply.
1260.Subsection (2) treats the “sum” received as a receipt of the property business. As this rule affects the calculation of the profits of a property business it appears in this Chapter rather than with the post-cessation receipt rules of which, in the source legislation, it forms part.
1261.The source legislation applies “for all purposes”. This section applies for income tax purposes. Section 106(2) of ICTA (as amended by paragraph 85 of Schedule 1 to this Act) applies for corporation tax purposes. Section 37(1) of TCGA ensures that any sums received as a result of the transfer are not charged to capital gains tax.
1262.Subsection (3) makes it clear that these sums are not post-cessation receipts.