CTM06065 | Corporation tax: company reconstructions: transfers of trade: without change in ownership - terminal losses
From HM Revenue & Customs · Company Taxation Manual
, S944 and S944A to S944E
When a trade ceases due to a company transferring a trade () to a company in common ownership (), 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
( and S944C)
Where a company has transferred a trade to a company in common ownership, it cannot make a terminal loss claim under or S45F. However, the restriction on the latter does not apply to from-1 April 2017 trading losses carried forward where the trade was transferred before 13 July 2017.
Commencement provisions
(, S944A and S944B)
The successor may claim to set off from-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 by virtue of .
The successor may claim to set off post-1 April 2017 losses against future total profits and future trading profits under or S45B provided that
relief has not been given under or (group relief) in respect of the predecessor's loss,
all other conditions for carrying forward a loss under and S45B have been met in relation to the predecessor’s trade, and
the relevant liabilities restriction () does not apply.