CTM06610 | Change of Ownership: Shell Companies – Introduction
From HM Revenue & Customs · Company Taxation Manual
The change in ownership of "shell companies" rules were introduced by for changes in ownership on or after 20 March 2013. The rules were introduced to extend the long-standing change of ownership rules to include companies that are not carrying on a trade, investment business or UK property business.
In broad terms the rules prevent certain reliefs for non-trading debits and losses () where there is a shell company which undergoes a change of ownership as defined under ().
For these purposes a shell company is a company which
is not carrying on a trade,
is not a company with an investment business, and
is not carrying on a UK property business.
If the rules apply, they treat the true accounting period (AP) in which the change of ownership took place as two separate notional APs, the first ending with the date of change and the second covering the remainder of the period. The non-trading amounts for the true AP are then apportioned between the two notional periods ().