Section 676CB — Corporation Tax Act 2010: Restriction on surrender of carried-forward losses

Restriction on surrender of carried-forward losses 676CB 1 Subsection (3) applies if a company (“the claimant company”) would, (apart from this section), be eligible under Part 5A to make a relevant claim for group relief for carried-forward losses.

2 For the purposes of this section a claim for group relief for carried-forward losses is a “relevant claim” if it is—

a for an accounting period ending after the change in ownership, and b in respect of an amount surrendered by the transferred company or a co-transferred company which is a relevant pre-acquisition loss.

3 The general rule is that the relief is not available.

4 The general rule is subject to the exceptions in sections 676CD and 676CE.

5 For the purposes of this section—

a the accounting period of the company mentioned in subsection (2)(b) in which the change in ownership occurs is treated as two separate accounting periods, the first ending with the change and the second consisting of the remainder of the period, and b the profits or losses of the accounting period are apportioned to the two periods.

6 Any apportionment under subsection (5)(b) is to be made on a time basis according to the respective lengths of the two periods.

7 But if that method of apportionment would work unjustly or unreasonably in any case, such other method is to be used as is just and reasonable.