Corporation Tax Act 2010 (c. 4)

Part 14 U.K. Change in company ownership

Modifications etc. (not altering text)

C1 Pt. 14 applied (1.4.2022 in relation to accounting periods beginning on or after that date) by Finance Act 2022 (c. 3), s. 51(1), Sch. 7 para. 20

C2 Pt. 14 applied (with modifications) (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), Sch. 1 para. 18 (with ss. 15(1), 16(1), 17)

[F1 CHAPTER 2D U.K. Asset transferred within group: Restriction of group relief for carried-forward losses

Textual Amendments

F1 Pt. 14 Ch. 2D inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 78

676DA Introduction to Chapter U.K.

(1) This section applies if—

(a) there is a change in the ownership of a company (“the company”) on or after 1 April 2017, and

(b) the following are met—

• conditions 1 and 2, or

• condition 3.

(2) Condition 1 is that after the change in ownership the company acquires an asset from another company in circumstances such that—

(a) section 171 of TCGA 1992 (no gain/no loss transfer within a group), or

(b) section 775 of CTA 2009 (tax-neutral transfer within a group),

applies to the acquisition.

(3) Condition 2 is that—

(a) in a case within subsection (2)(a), a chargeable gain accrues to the company on a disposal of the asset within the period of 5 years beginning with the change in ownership, or

(b) in a case within subsection (2)(b), there is a non-trading chargeable realisation gain on the realisation of the asset within that period.

(4) Condition 3 is that a chargeable gain on a disposal of an asset within the period of 5 years beginning immediately after the change in ownership (or an amount of such a gain) is treated as accruing to the company by virtue of an election under section 171A of TCGA 1992 (notional transfers within a group).

(Accordingly, references in this Chapter to the accrual of a relevant gain are to be read in the light of section 171B(2) and (3) of TCGA 1992.)

(5) For the purposes of subsection (3), an asset (P) acquired by the company as mentioned in subsection (2) is treated as the same as an asset (Q) owned at a later time by the company if the value of Q is derived in whole or in part from P.

(6) In particular, P is treated as the same as Q for those purposes if—

(a) Q is a freehold,

(b) P was a leasehold, and

(c) the lessee has acquired the reversion.

(7) In this Chapter

• “the change in ownership” means the change in ownership mentioned in subsection (1),

• “the company” has the same meaning as in this section,

• “non-trading chargeable realisation gain” means a chargeable realisation gain (within the meaning of Part 8 of CTA 2009 (intangible fixed assets)) which is a non-trading credit for the purposes of that Part (see section 746 of that Act),

• “realisation” has the meaning given by section 734 of CTA 2009, and

• “the relevant gain” means the gain (or amount of a gain) within subsection (3)(a) or (b) or (4).]