Transfer of business to a company
23/08/1988
Query
Liabilities taken over - do they represent consideration?
Decision
Liabilities of the business included in the transfer rank as considration for the transfer because the discharge of liabilities of the transferor by the transferee is equvalent to the payment of cash by the transferee to the transferor. In practice, however, where an individual transfers a business to a company, in exchange for shares only and assets exceed liabilities, bona fide trade creditors taken over will not be treated as consideration.
Capital Gains Tax
Section 600, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:G5(1)