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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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Corporation Tax: trading losses - relief against total profits: restrictions for farming companies - commencement and cessation

CTA10/S48 (CTM04710) does not deny relief under CTA10/S37 where a company’s trade of farming or market gardening was set up and commenced within the period of five years before the beginning of the accounting period for which relief is claimed.

However where:

  • the company has succeeded to the trade, and
  • the predecessor’s trade has not been treated as discontinued for the purposes of capital allowances and charges because of CTA10/S940A,

the trade is treated as a continuous trade for S48 purposes.

There is guidance on CTA10/PART 22/CHAPTER 2 at CTM06000+ which deals with company reconstructions without change of ownership. See BIM75635 for companies controlled by a spouse where a trade transferred between the parties is a continuous trade.