Part 14

Change in company ownership
Chapter 6

Recovery of unpaid corporation tax

Recovery of unpaid corporation tax for accounting period ending on or after change

The expectation condition
714
1
The condition mentioned in section 713(1)(d) is that it would be reasonable (apart from section 713) to make the inference specified in subsection (3) from any of the matters specified in subsection (2).
2
Those matters are—
a
the terms of any transactions entered into in connection with the change in the ownership of Y, and
b
the other circumstances of the change and of any such transactions.
3
The inference is that at least one of the transactions mentioned in subsection (2) was entered into by one or more of its parties on the assumption that, if a potential tax liability were to arise, it would be unlikely to be met or to be met in full.
4
A “potential tax liability” is a liability to pay corporation tax which would or might arise—
a
from an assessment, made after the change in ownership, on Y or an associated company (whether or not a particular associated company), and
b
in foreseeable circumstances.
5
Circumstances are “foreseeable circumstances” if—
a
the circumstances were reasonably foreseeable at the time of the change in ownership, or
b
there was a reasonably foreseeable risk at that time that the circumstances might occur.
6
For the meaning of “transaction entered into in connection with change in ownership”, see section 715.
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
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)