CTM06705 - Corporation Tax: loss buying: Introduction

CTA10/PART14, PART14A-B

As of 1 April 2017, the existing loss-buying rules in Parts 14 to 14B have been extended.

Certain pre-existing provisions have been modified.

In addition, a number of new provisions have been introduced at CTA10/PART14/CH2A-E.

Broadly, these changes comprise an extended time limit for considering whether loss buying conditions have been met, and a number of new restrictions designed to counter misuse of group relief for carried-forward losses and the relaxations on relief for carried-forward losses against a company’s total profits.

All of Chapters 2A-E concern situations where there is a change in ownership of a company, C, which occurs on or after 1 April 2017.

Chapter 2A restricts relief for losses and other amounts carried forward in a situation where there has been a major change in the nature of the business of company C.

Chapters 2B and 2D restrict relief for certain losses carried forward in situations where a chargeable gain is effectively transferred to C from another company within the same capital gains group.

Chapter 2C restricts the amounts company C can surrender as group relief for carried-forward losses.

Chapter 2E restricts reliefs available following a transfer of trade.