This paragraph applies if a transfer scheme provides for a relevant transfer as a result of which the transferor ceases to carry on a trade and the transferee begins to carry it on.

A transferor treated as ceasing to carry on a trade for the purposes of F1Chapter 1 of Part 22 of the Corporation Tax Act 2010 (transfers of trade without a change of ownership) is to be so treated for the purposes of this paragraph.

A transferee treated as beginning to carry on a trade for the purposes of F2that Chapter is to be so treated for the purposes of this paragraph.

Sub-paragraph (5) applies if the transfer will result in the transferee being entitled to relief for an amount in respect of the trade F3under section 45 of the Corporation Tax Act 2010 (carry forward of trading losses) by virtue of section 944(3) of that Act.

In such a case the scheme may provide that the amount is to be treated as such amount (the replacement amount) as is specified in or determined in accordance with the scheme.

Sub-paragraph (7) applies if the trade concerned is in fact part of a trade of the transferor and the transferor is entitled to relief for an amount under F4section 45 of the Corporation Tax Act 2010 in respect of the part retained.

In such a case the scheme may provide that the amount is to be treated as such amount (the replacement amount) as is specified in or determined in accordance with the scheme.

A provision under sub-paragraph (5) or (7) must be such that the replacement amount is not greater than the amount it replaces; and the replacement amount may be nil.

When the scheme comes into force a provision made under sub-paragraph (5) or (7) is to have effect for the purposes of arriving at the amount of relief concerned.