CB 2 Amounts received on disposal of business assets that include trading stock
When this section applies


This section applies in an income year when—


a person (person A) who owns or carries on a business disposes of some or all of the assets of the business to another person (person B); and


the disposal is made outside the ordinary course of the business, or to put an end to the business or a part of it; and


the assets consist of or include trading stock of the business, or a share or interest in trading stock.

Assessable income of person A


An amount that person A receives from the disposal of the trading stock is taken into account in determining their income for the income year. The amount is derived at the time of disposal referred to in subsection (1).

Price of acquisition by person B


In the calculation of the taxable income of person B for the income year or a later income year, person B is treated as acquiring the trading stock for the amount of the disposal referred to in subsection (2).



In this section, a disposal—


includes the passing of property by an exchange, gift, distribution under a will or on intestacy; and


does not include a disposal under any of sections FC 3 to FC 8 (which relate to distributions after death) that is not at market value.

Relationship with section CB 1


This section overrides section CB 1.

Defined in this Act: amount, assessable income, business, dispose, distribution, income year, market value, property, taxable income, trading stock

Compare: 2004 No 35 s FB 3