Corporation Tax Act 2010 section 676CE

Exceptions to restrictions

Section 676CE sets out the circumstances in which the restrictions on surrendering carried-forward losses as group relief following a change in company ownership do not apply.

• The restriction on group relief for carried-forward losses only applies for five years after the end of the accounting period in which the change in ownership occurs — after that, the losses can be surrendered freely.
• The restriction does not apply at all where the surrendering company and the claimant company were already in the same group immediately before the change in ownership took place.
• Where an accounting period of the claimant company straddles the fifth anniversary, that period is split into two notional periods and profits or losses are apportioned between them, normally on a time basis.
• If a time-based apportionment would produce an unjust or unreasonable result, an alternative method that is just and reasonable must be used instead.