VCM20030 - EIS: general: preparing to carry on a trade

ICTA/S289 (2)(a); ITA/S179 (2)(b)

‘Preparing' to carry on a trade covers both the setting up of a new trade and the acquisition of an existing trade from its present owner. Where a company acquires a trade by means of first acquiring the company which carries it on the acquisition of the shares counts as preparation (see VCM12070).

Preparing to trade does not cover preliminary activities such as market research aimed at discovering whether a trade would be likely to succeed, or raising capital, neither does it cover research and development.

As regards the date when a company begins to carry on a trade, see BIM70501 onwards.