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This scenario is in the UK.

A person X makes 1.2 million in sales of an asset, before the end of the tax year the invests all the sales into a newly created corporation and they become owners equity.

Should the X's corporation then pay corporation tax on the amount, or is X liable to pay capital gains tax on the 1.2 million as soon as they make the profit?

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X owes the tax

When X realised the gain, the triggered the tax liability. Even if they transferred the asset to the company in return for equity without going through cash first, that would trigger the liability.

HMG does not care what you do with your gain, invest it, spend it, blow it at the track, so long as you pay the tax.

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