Corporation Tax Act 2010 section 676AH

Restriction on the carry forward of post-1 April 2017 non-trading deficit from loan relationships

Section 676AH restricts the ability to carry forward non-trading loan relationship deficits that arose before a change of company ownership, preventing them from being set off against affected profits after the ownership change.

• A pre-acquisition non-trading deficit is one arising from a company's loan relationships for an accounting period that began before the change in ownership.
• The restriction applies where such a deficit is apportioned to the first notional accounting period under the rules in section 685(2).
• Where the restriction applies, none of the pre-acquisition deficit may be carried forward and set off against affected profits of the accounting period beginning immediately after the ownership change, or any later period.
• This rule applies specifically to post-1 April 2017 non-trading deficits carried forward under Chapter 16A of Part 5 of CTA 2009.