Not every change by which one trader replaces another amounts to
a succession. It must be true and fair to say that the business in
respect of which the successor is making profits is the business to
which he or she succeeded. The business, regarded after the
succession, need not, however, be identical in every respect and in
every detail with the business which was carried on before the
succession (Laycock v Freeman Hardy and Willis Ltd [1938] 22TC288,
pages 297 - 298).
It is a question of fact for the Commissioners whether
changes made to the business are so substantial as to make it right
to say that the business as carried on by the successor is not the
same as the one to which he or she succeeded (see Maidment v Kibby
[1993] 66TC137, for a case where the court refused to interfere
with a Commissioners’ decision on this issue - the facts were
‘just about sufficient’ to support their conclusion).
If there is a succession it is immaterial to what extent the
successor merges the activities with an existing business. The
commencement provisions must still be applied to the profits
properly attributable to the trade to which he or she has succeeded
(Briton Ferry Steel Co Ltd v Barry [1939] 23TC414, at page
429).
