Corporation Tax Act 2010 section 676AD

Notional split of accounting period in which change in ownership occurs

Section 676AD provides for the accounting period in which a change of company ownership occurs to be notionally split into two separate periods, and sets out how amounts are apportioned between them.

• When a company changes ownership, the accounting period in which the change occurs is treated as two separate "notional" accounting periods — one ending on the date of the change and the other covering the remainder.
• The apportionment rules in section 685 are used to divide relevant amounts (such as losses and deductions) between the two notional periods on a fair basis.
• The terms "actual accounting period" and "notional accounting periods" carry the same meaning throughout this chapter and in sections 685 and 686 as applied here.
• This notional split is used solely for the purposes of this chapter's restrictions on relief — it does not create two real accounting periods for other tax purposes.