Special provisions as to certain transfers
25.—(1)  This section has effect in relation to any transfer of any property without consideration as a result of —
(a)a conversion of a firm to a limited liability partnership under section 26 of the Limited Liability Partnerships Act 2005;
(b)a conversion of a private company to a limited liability partnership under section 27 of the Limited Liability Partnerships Act 2005;
(c)a conversion of any business carried on by an individual proprietor to one carried on by a firm, where the individual proprietor is a partner of, and has control over, the firm after the conversion; or
(d)a conversion of any business carried on by a firm to one carried on by an individual proprietor, where the individual proprietor was a partner of, and had control over, the firm before the conversion,
and the transfer is not one to which section 33 applies.
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(2)  For the purposes of subsection (1), “conversion” means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and undertaking —
(a)in the case of subsection (1)(a) — of the partners of the firm relating to the business to the limited liability partnership;
(b)in the case of subsection (1)(b) — of the private company to the limited liability partnership;
(c)in the case of subsection (1)(c) — of the individual proprietor relating to the business to the partners of the firm; or
(d)in the case of subsection (1)(d) — of the partners of the firm relating to the business to the individual proprietor.
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(3)  Where the parties to the transfer of the property by written notice to the Comptroller so elect —
(a)the like consequences ensue for the purposes of sections 19, 19A, 19D, 20 and 21 as would have ensued if the property had been transferred —
(i)in the case of machinery or plant — for a sum equal to the amount of the expenditure on the provision of the machinery or plant remaining unallowed immediately before the transfer, computed in accordance with section 20; or
(ii)in the case of an IRU — for a sum equal to the amount of capital expenditure remaining unallowed immediately before the transfer, computed in accordance with section 19D;
(b)despite anything in section 19, where the transfer is a transfer of machinery or plant, no initial allowance is to be made to the transferee;
(c)despite anything in section 19A, where the transfer is a transfer of machinery or plant, allowances provided under that section continue to be available as if no transfer had taken place;
(d)despite anything in section 19D, where the transfer is a transfer of an IRU, the writing‑down allowances provided under that section continue to be available as if no transfer had taken place; and
(e)despite anything in paragraphs (a) to (d) or in sections 19D and 20, such balancing charge (if any) must be made on the transferee on any event occurring after the date of the transfer as would have fallen to be made on the transferor if the transferor had continued to own the property and had done all the things and been allowed all the allowances and deductions in connection with the property as were done by or allowed to the transferee.
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(4)  No election may be made under subsection (3) unless, before the transfer in the case of the transferor and after the transfer in the case of the transferee, the property is used in the production of income chargeable under the provisions of this Act.
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(5)  In this section —
“firm” and “individual proprietor” have the meanings given by section 2(1) of the Business Names Registration Act 2014;
“IRU” has the meaning given by section 19D(1);
“private company” has the meaning given by section 2(1) of the Limited Liability Partnerships Act 2005.
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