Revenue Precedent

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Revenue Precedents

Liabilities of the business included in the transfer rank as consideration for the transfer because the discharge of liabilities of the transferor by the transferee is equivalent to the payment of cash by the transferee to the transferor. In practice, however, where an individual transfers a business to a company, in exchange for shares only and assets exceed liabilities, bona fide trade creditors taken over will not be treated as consideration. G5(1).