Whenever there is a
complete change in ownership of a continuing
business, at the date of change, you deem the business to have
ceased and recommenced (ICTA88/S113 (1)).
Whenever there is a partial change in ownership of a continuing business, at the date of change, the business is automatically deemed to continue (ICTA88/S113 (2)). There is no option to elect for a deemed cessation.
But you apply the commencement and cessation rules as introduced by ICTA88/S111 (4) to the ‘deemed trade or profession’ carried on by the individual partners who join or leave a partnership at a change of ownership.
Actual cessation of business
ICTA88/S113 only applies where there is a ‘succession’ to a particular business. Therefore if a change of ownership is coincident with the actual cessation of the original trade and the setting up of a new trade ICTA88/S113 does not apply. Instead the normal cessation and commencement rules of ICTA88/S61, ICTA88/S63 and ICTA88/S63A apply to the partners as appropriate.