CTM06765 - Corporation Tax: loss buying: major change in the business of a transferred company: restriction of losses

CTA10/S676AF, S676AH-AK

Where the restriction under CTA10/PART14/CH2A applies, a company is prevented from setting certain losses and other amounts against its affected profits.

Losses are only restricted if they are incurred;

· Before the change in ownership, and

· On or after 1 April 2017.

This means that the company will need to apportion amounts if it has an accounting period that begins before and ends after the change in ownership.

The company is prevented from deducting restricted losses from affected profits under any of the following provisions:

· Post-April 2017 trade losses carried forward against total profits (CTA10/S45A(5)),

· Terminal relief for trade losses carried forward (CTA10/S45F(3)),

· Excess carried-forward non-decommissioning losses of oil and gas ring fence trades (CTA10/S303C(3)),

· Excess carried-forward BLAGAB trade losses (FA12/S124B(3)),

· Non-trading deficits from loan relationships carried forward against total profits (CTA09/S463G),

· Non-trading losses on intangible fixed assets carried forward (CTA09/S753(3)),

· Expenses of management carried forward (CTA09/S1219, S1223),

· Allowances treated as expenses of management under CAA01/S253 and CTA09/S1233 and carried forward as above,

· UK property business losses carried forward (CTA10/S62(5), S63(3)).

The restriction also prevents the company from bringing certain debits into account.