categorised as self-employed, penalties, excessive entertaining expenditure. These are covered in points (i) to (vi) above;
15.4.2 there are then several matters concerned with any tax which might unexpectedly arise from any leakage during the stub period: the Buyer does not wish to have a tax liability which relates to value extracted prior to Completion, in the form of a distribution or otherwise. This concern is covered in points (vii) to (ix) above; 15.4.3 there is then a concern as to capital gains transactions, degrouping charges and transactions which are manifestly out of the normal course, and these are addressed in points (x) to (xv). 15.5 This is an area that is still being developed in tax covenants; the above list of matters which are not to be considered as in the ordinary course of business is clearly not exhaustive. 15.6 We would not wish to see a theme develop of including every type of unusual transaction in an ever-burgeoning list in this part of the tax covenant. We believe that a better approach is for any extension to be by reference to any specific groups not already included in the above. 15.7 The inclusion of any transaction involving TCGA 1992 as being outside the normal course may appear a little harsh: by way of example, if a Company with a large number of freehold retail outlets was following a constant policy of buying and selling such outlets as it developed its business, both the profits on sale and the related tax may be considered to be very much part of the normal business of that company. However, it is our view that such a situation should be dealt with by specific tailoring for such a situation. 15.8 It is our opinion that the Buyer will generally be content with a tax charge of £280,000 or so if he gains the benefit of profits of £1 million in the period from the Last Accounts to Completion. If there are potential tax charges which will increase the tax charge above his preconceived notion of the fair range, then he seeks protection from them.
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