This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Company Taxation Manual

Corporation tax: company reconstructions: transfers of trade: without change in ownership - terminal losses

CTA10/S943A, CTA10/S944, CTA10/S944A-E

When a trade ceases due to a company transferring a trade (CTM06060) to a company in common ownership (CTM06010), during an accounting period beginning on or after 1 April 2017, there are modifications to the normal cessation and commencement treatment of carried-forward trading losses.

Cessation provisions


Where a company has transferred a trade to a company in common ownership, it cannot make a terminal loss claim under S39 CTA 2010.


This restriction does not apply to pre 1 April 2017 trading losses carried forward where the trade was transferred before 13 July 2017.

Commencement provisions

(s944 & s944A-B)

The successor may claim to set off pre 1 April 2017 losses against future income of the same trade provided the predecessor has not claimed relief for any prior and current year losses or made a terminal loss claim under s944C.

The successor may claim to set off post 1 April 2017 losses against future total profits and future trading profits under s45A or s45B provided that;

  • Relief for any prior year, current year, or current year group relief claims in respect of the predecessor’s loss has not been given, and


  • The relevant liabilities restriction (CTM06250) does not apply.


The successor may claim the carried forward losses where the following conditions apply for the predecessor trade,  

  • The trade had not become small or negligible in the loss-making period,
  • The trade was not carried on outside the UK,
  • The trade was not carried out on a commercial basis with a view to the making of a profit, or so as to afford a reasonable expectation of making such a profit, or
  • The trade was not in relation to farming or market gardening

There are additional rules for ring-fence trades in respect of non-decommissioning losses and for losses in respect of trades in creatives industries that have ceased.