(1)The business of C (tax-exempt) shall be treated for the purposes of corporation tax as ceasing immediately before cessation.
(2)Assets which immediately before cessation are involved in the business of C (tax-exempt) shall be treated for the purposes of corporation tax as being sold by C (tax-exempt) immediately before cessation and re-acquired immediately after cessation by C (post-cessation).
(3)The sale and re-acquisition deemed under subsection (2) shall be treated as being for a consideration equal to the market value of the asset.
(4)For the purposes of CAA 2001—
(a)the sale and re-acquisition deemed under subsection (2)—
(i)shall not give rise to allowances or charges, and
(ii)shall not make it possible to make an election under section 198 or 199 of that Act (apportionment),
(b)subsection (3) above shall not apply, and
(c)anything done by or to C (tax-exempt) before cessation in relation to an asset which is deemed to be sold and re-acquired shall be treated after cessation as having been done by or to C (post-cessation).
(5)For the purposes of corporation tax, on cessation an accounting period of C (residual) shall end and an accounting period of C (post-cessation) shall begin.
(6)For the purposes of subsection (2) an asset is involved in the business of C (tax-exempt) if it is property involved in the business within the meaning given by section 107(6)(a).
Modifications etc. (not altering text)
C1S. 131 applied (with modifications) (1.1.2007) by The Real Estate Investment Trusts (Joint Ventures) Regulations 2006 (S.I. 2006/2866), reg. 7(2)
S. 131 applied (1.1.2007) by The Real Estate Investment Trusts (Joint Ventures) Regulations 2006 (S.I. 2006/2866), reg. 13(3) (subject to reg. 14)
C2S. 131 applied (with modifications) (31.12.2007) by The Real Estate Investment Trusts (Joint Venture Groups) Regulations 2007 (S.I. 2007/3425), reg. 13(9)
S. 131 applied (with modifications) (31.12.2007) by The Real Estate Investment Trusts (Joint Venture Groups) Regulations 2007 (S.I. 2007/3425), reg. 23(9)