Corporation Tax Act 2010 section 677

Introduction to Chapter

Section 677 introduces the chapter dealing with restrictions on relief for companies with investment business following a change in ownership, and sets out the three conditions under which the chapter's provisions apply.

• The chapter applies when there is a change in ownership of a company with investment business and at least one of three conditions (A, B or C) is met.
• Condition A is triggered where, after the change in ownership, there is a significant increase in the company's capital (as defined in sections 688 to 691).
• Condition B applies where, within an 8-year window starting 3 years before the ownership change, there is a major change in the nature or conduct of the company's business — including a major shift in the type of investments held, even if that shift resulted from a gradual process that began before the 8-year period.
• Condition C applies where the ownership change takes place after the company's business activities have become small or negligible and before any significant revival of that business.