The transfer of business assets by an  individual to a company controlled by them is a disposal for capital gains tax  purposes. The disposal is deemed to take place at market value because the sole  trader and the company are 'connected persons'. The sole trader will therefore  have a capital gain on the chargeable assets at the point of incorporation. The  chargeable assets will usually be land and buildings and possibly goodwill. It  is unlikely that gains will arise on other assets such as plant and machinery  as these will either be standing at a loss (for which relief is given via the  capital allowances computation) or at a gain, which will be exempt under the  chattels rules.

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