BIM72425 - Partnerships: Demergers

Where a business is split (demerged) into two separate parts then you should normally apply the cessation rules to the original business and the commencement rules to the new businesses. This is because a person cannot succeed to part of a business.

But if one of the businesses formed after the demerger can be seen to be the same business as that previously carried on before the demerger, even though it has lost part of its customers and its assets, and there is either no change or only a partial change of ownership then you should apply the automatic continuation basis to that business.