CTM07505 | Corporation Tax: tax avoidance involving carried-forward losses: overview
From HM Revenue & Customs · Company Taxation Manual
is an anti-avoidance rule introduced by for the purposes of calculating the profits of accounting periods (APs) beginning on or after 18 March 2015. It applies to arrangements that seek to gain a Corporation Tax advantage by gaining access to certain carried-forward reliefs and ‘refreshing’ them into more versatile in-year deductions, a process known as corporate loss refreshing. describes loss refreshing, and has some examples.
The rule restricts the circumstances in which a company may make a deduction in respect of a ‘relevant carried-forward relief’. identifies these reliefs, and describes the new deductions covered by the rule.
Where the five conditions are met, the company will not be able to use its carried-forward reliefs against profits of the arrangement.
The rules apply to arrangements entered into at any time, but the denial of carried-forward loss relief will only have effect for APs beginning on or after 18 March 2015. Where an AP straddles that date, it is notionally split into two for the purposes of calculating the company’s taxable total profits under the restriction ().