Background
27.This section is one of two preventing loss buying introduced by this Act.
28.The section uses the term “qualifying change” as defined in Section 212C of Chapter 16A of Part 2 CAA 2001
29.Section 212C CAA2001 defines a qualifying change in relation to a company as -
A change in ownership of a company,
When a company becomes a member of a group
When a company moves from a group into a consortium.
When a consortium member increases it ownership of a consortium company.
Where C ceases to carry on the whole or part of an activity and the activity (or part of it) begins to be carried on in partnership by two or more companies.
When a partner increases its share in a partnership that is carrying out an activity
Current corporate tax loss buying rules
30.The general concept is that losses brought forward or after a change in ownership should be allowable only to the company and trade in which they occurred.
31.Section 39 of CTA 2010 provides that if a company sells its trade to a company that is not within the same 75% ownership then the cessation rules apply and the losses do not transfer.
32.Part 14 of CTA 2010 deals with realised losses where there is a change in ownership of a company (and where other circumstances apply). If the Part applies losses arising prior to the change are no longer available for periods after the change in ownership.
