Corporation Tax Act 2010 section 676AA

Introduction to Chapter

Section 676AA introduces the rules that restrict the use of carried-forward losses where a company changes ownership on or after 1 April 2017 and there is also a major change in business activities within a specified timeframe.

• The rules apply when two conditions are met: a change in company ownership on or after 1 April 2017, and a major change in the business of the transferred company or a co-transferred company within a required period (also not before 1 April 2017)
• For restrictions on carried-forward trade losses (section 676AF), the major change must occur within a 5-year window that begins no more than 3 years before the ownership change
• For restrictions on other types of losses and debits (sections 676AG to 676AK), the major change must occur within an 8-year window beginning 3 years before the ownership change
• The term "trade" for these purposes includes an office, and a "co-transferred company" is a related company as defined in section 676AL