Corporation Tax Act 2010 section 676BA

Introduction to Chapter

Section 676BA sets out the scope of Chapter 2B, which restricts the use of trading losses where a company changes ownership and gains arise from assets acquired intragroup or transferred notionally within a group.

• The rules apply where a company changes ownership on or after 1 April 2017 and subsequently disposes of an asset acquired from a fellow group company on a no gain/no loss basis, realising a gain within five years of the ownership change.
• The rules also apply where a chargeable gain is treated as accruing to the company within five years of the ownership change through a notional intragroup transfer election.
• An asset acquired intragroup is treated as the same asset if it later changes form but derives its value from the original asset — for example, where a leasehold is converted into a freehold by the lessee acquiring the reversion.
• Chapter 2B applies only to trading losses; other forms of loss remain within Chapter 4, and relief under Part 5A is dealt with separately in Chapter 2D.