CTM06755 - Corporation Tax: loss buying: major change in the business of a transferred company: required period

CTA10/S676AA

For the restriction at CTA10/PART14/CH2A to apply, there must be a major change in the business of a company as well as a change in the company’s ownership.

The change in the business must occur within a required period. However, the exact character of the required period depends on the type of loss Chapter 2A is used to restrict.

Where the restriction applies to prevent relief for carried-forward trade losses, the required period is:

· A period of five years,

· Beginning no later than the change in ownership, and

· Beginning no earlier than three years before the change in ownership.

Where the restriction applies to prevent relief for other amounts, the required period is:

· A period of eight years,

· Beginning three years before the change in ownership.

In both cases, a change in the business that occurs entirely over a space of time more than five years after the change in ownership, or more than three years before, will not bring the restriction into effect.