Section 945 — Corporation Tax Act 2010: Cases in which predecessor retains more liabilities than assets

Cases in which predecessor retains more liabilities than assets 945 1 This section applies if L exceeds A. 2 “L” is the amount of the predecessor's liabilities so far as they—

a are outstanding immediately before the transfer of the transferred trade, and b are not transferred to the successor on the transfer of the trade. 3 “A” is the sum of the values of—

a the predecessor's assets immediately before the transfer of the transferred trade so far as they are not transferred to the successor on that transfer, and b the consideration given to the predecessor by the successor in relation to the transfer of the transferred trade.

4 The relief to be given to the successor as a result of sections 944 to 944E is limited to— R - E where— R is the total amount of loss for which relief could be given to the successor as a result of sections 944 to 944E , ignoring this section, and E is the amount by which L exceeds A.

5 If R does not exceed E, no relief is to be given to the successor.