What does section 676BB of the Corporation Tax Act 2010 do?

Section 676BB requires that where a change of company ownership occurs during an accounting period, that period is notionally split into two separate periods. The first ends on the date of the ownership change and the second covers the remainder. Relevant amounts are then apportioned between the two notional periods using the rules in section 702.

How are amounts apportioned between the two notional accounting periods under section 676BB?

The amounts listed in the table in section 702(2) for the actual accounting period are divided between the two notional accounting periods using the method set out in section 702. For example, amounts apportioned on a time basis are divided proportionally according to the length of each notional period relative to the full actual accounting period.

Does the notional split under section 676BB require the company to file two separate tax returns?

No. The split under section 676BB is purely notional. The company does not file two separate tax returns. The division is used solely for the purposes of applying the restrictions in the relevant chapter of the Corporation Tax Act 2010 to the periods before and after the change of ownership.

What do the terms 'actual accounting period' and 'notional accounting periods' mean in section 676BB?

The 'actual accounting period' is the company's real accounting period in which the ownership change occurs. The 'notional accounting periods' are the two periods created by the notional split — the first ending on the change date and the second covering the remainder. These terms carry the same meaning throughout the chapter and in sections 702 and 703.

Corporation Tax Act 2010 section 676BB

Notional split of accounting period in which change in ownership occurs

Section 676BB provides for the accounting period in which a change in company ownership occurs to be notionally split into two separate periods, and for relevant amounts to be apportioned between those two periods.

The accounting period in which a change of ownership takes place (the "actual accounting period") is treated as two separate "notional accounting periods" — the first ending on the date of the ownership change, and the second covering the remainder of the period.
The rules in section 702 (which deal with how amounts are apportioned) are applied to divide the relevant figures for the actual accounting period between the two notional periods.
The amounts listed in the table in section 702(2) for the actual accounting period are split across the two notional accounting periods in accordance with the method set out in section 702.
The terms "the actual accounting period" and "notional accounting periods" carry the same meaning throughout this chapter and in sections 702 and 703 as they are applied under these rules.

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