Corporation Tax Act 2010 section 676AG

Restriction on debits to be brought into account

Section 676AG restricts the amount of certain non-trading loan relationship debits that a transferred company can bring into account after a change in ownership.

• After a change in ownership, relevant non-trading debits from loan relationships are restricted to prevent excessive deductions against profits.
• The restriction applies by comparing Amount A (cumulative relevant non-trading debits claimed after the ownership change) with Amount B (the taxable total profits of the accounting period ending with the change in ownership).
• Relevant non-trading debits are disallowed to the extent that Amount A exceeds Amount B, effectively capping the total debits at the level of pre-change profits.
• The restriction applies for the accounting period beginning immediately after the change in ownership and for all subsequent accounting periods.