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HMRC internal manual

Company Taxation Manual

ACT: set-off against CT on profits: capacity buying: conditions

ICTA88/S245 (1) & (7)

Section 245 applied, whether or not there was any avoidance motive, where:

  • within any period of three years there was both a change in the ownership of a company and a major change in the nature or conduct of a trade or business carried on by the company,


  • where there was a change in the ownership of a company at a time when the scale of its trading or other business activities had become small or negligible.

ICTA88/S769, which defines change in ownership of a company for ICTA88/S768 purposes,also applied to Section 245 (see CTM06340 to CTM06350). Forinformation on:

  • the meaning of ‘major change’ refer to CTM20320,
  • the provision about the scale of activities becoming small or negligible, refer to CTM06390.

The following Section 768 provisions also applied to Section 245:

  • subsection 8 - extended time limit for making assessments,
  • subsection 9 - information powers (see CTM06340).