CTM06705 | Corporation Tax: loss buying: Introduction

CTA10/PART14 to PART14B

From 1 April 2017, the existing loss-buying rules in CTA10/PART14 to PART14B have been extended.

Certain pre-existing provisions have been modified.

In addition, a number of new provisions have been introduced at CTA10/PART14/CHAPTER2A to CHAPTER2E.

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

All of CTA10/PART14/CHAPTER2A to CHAPTER2E concern situations where there is a change in ownership of a company, C, which occurs on or after 1 April 2017.

CTA10/CHAPTER2A 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.

CTA10/CHAPTER2B and CHAPTER2D restrict relief for certain losses carried forward in situations where a chargeable gain is effectively transferred to company C from another company within the same chargeable gains group.

CTA10/CHAPTER2C restricts the amounts company C can surrender as group relief for carried-forward losses.

CTA10/CHAPTER2E restricts reliefs available following a transfer of trade.