Overview
2078.Chapter 2 is the first of four Chapters dealing with variations on the theme of “loss buying”.
2079.Companies can obtain corporation tax relief for various expenses and losses in different periods from the periods in which the expenses or losses arise. They can,however, only turn these reliefs into a reduction in tax liability if they have taxable profits against which the expenses or losses can be set. The shareholders of an unsuccessful company might therefore wish to monetise these tax reliefs by selling the company to people who might be able to make use of them. Sections 768 to 768E of, and Schedule 28A to, ICTA are directed against such “loss buying”.
2080.This Part of the Act does not deal with the buying in of group relief. Section 142, which is based on section 403A(9) and (10) of ICTA, prevents companies claiming group relief in relation to expenses and losses arising before a company joined the group.
2081.The loss buying provisions of TCGA are outside the scope of this Act. See, however, the commentary on section 694.
