A trade and assets purchase may involve the purchase of all the relevant assets, and the assumption of liabilities, along with a trade, or alternatively specified assets or liabilities may be retained by the seller. The tax implications of the transaction will depend on the specific items being transferred, since there are a series of separate disposals of the various assets involved.

Consideration will usually be for the acquisition of the business as a whole. For tax purposes this needs to be broken down between the various components included in the sale. The way in which the consideration is allocated between assets is a key area for tax planning.

Usually for an unconnected party transaction, the apportionment of consideration in the Sale and Purchase Agreement (SPA) will be acceptable. However, HMRC may impose a 'just and reasonable' basis in certain circumstances (see below).

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