CTM08720 | Corporation Tax: change of ownership: companies with investment business: conditions

CTA10/S677

S677 is modelled on CTA10/S673 (CTM06300 onwards).

It applies where there is a change in the ownership of an investment company (or 'company with investment business' for periods on or after 1 April 2004) and

• within a specified period beginning three years before the change, there is a major change in the nature or conduct of the business, or

• the change in ownership occurs after the scale of activities has become small or negligible and before any considerable revival of the business, or

• after the change there is a significant increase in the amount of the company's capital (CTM08750).

For accounting periods (APs) ending before 1 April 2017, the specified period is six years.

For APs beginning on or after 1 April 2017 the specified period is eight years. But the eight year period only applies where both the change in ownership and the major change in the nature or conduct of the business occur on or after 1 April 2017 (F(2)A17/SCH4/PARA80).

Where an AP begins before and ends on or after 1 April 2017, it is divided so that the period that falls before 1 April 2017 and the period that falls on or after that date are treated as two separate accounting periods (F(2)A17/SCH4/PARA190). See CTM04880.

For the purposes of CTA10/S677

• change in ownership is defined in CTA10/S719 (see CTM06340 and CTM06350), and

• a major change in the nature or conduct of the business includes a major change in the nature of the investments held, even if that change was the result of a gradual process which began before the period within which the change has to take place.