Chapter 5: Company without investment business: disallowance of property losses
Overview
2183.Chapter 5 is the fourth of four Chapters dealing with various kinds of loss buying.
Section 704: Company carrying on UK property business
2184.This section restricts relief for UK property losses in cases in which this Chapter applies. It is based on section 768D of ICTA.
2185.Subsections (1) to (3) lay down the conditions for the section to apply.
2186.Subsection (4) states the purpose of the section. In subsection (4), “the company” has the meaning given by subsection (1).
2187.Subsection (5) deems the accounting period in which the change of ownership occurs to be two separate accounting periods. The profits or losses of the actual accounting period must then be apportioned to the two notional accounting periods in accordance with subsections (6) and (7).
2188.Subsections (8) and (9) set out the consequences of this apportionment.
2189.Subsection (10) defines “major change in the nature or conduct of a trade or UK property business”.
Section 705: Company carrying on overseas property business
2190.This section restricts relief for the company’s overseas property business loss in cases in which this Chapter applies. It is based on section 768D of ICTA, and has a similar structure to section 704 of this Act.
2191.Section 768D(9) of ICTA has to be read as implying that, in a case in which section 768D applies in relation to an overseas property business, references to section 392A of ICTA have to be read as references to the corresponding provisions of section 392B of that Act. Otherwise section 768D of that Act applies in such a case but does not actually do anything. Subsections (4) and (8) therefore refer to section 66, which is based on section 392B of ICTA.
2192.Section 768D(5) of ICTA can have no application in relation to an overseas property business, and is therefore not rewritten in this section.
