CTM06755 - Corporation Tax: loss buying: major change in the business of a transferred company: required period

CTA10/S676AA

For the restriction at CTA10/PART14/CHAPTER2A to apply, there must be a major change in the business of a company as well as a change in the company's ownership.

The change in the business must occur within a required period.聽 However, the exact character of the required period depends on the type of loss CHAPTER2A is used to restrict.

Where the restriction applies to prevent relief for carried-forward trade losses, the required period is

  • a period of five years,
  • beginning no later than the change in ownership, and
  • beginning no earlier than three years before the change in ownership.

Where the restriction applies to prevent relief for other amounts, the required period is

  • a聽period of eight years,
  • beginning three years before the change in ownership.

In both cases, a change in the business that occurs entirely over a period of time more than five years after the change in ownership, or more than three years before, will not bring the restriction into effect.