What does section 683 of the Corporation Tax Act 2010 do?

Section 683 restricts a company's ability to use UK property business losses after a change in ownership. It prevents new owners from exploiting pre-change property losses by prohibiting those losses from being carried forward into any accounting period ending after the ownership change, effectively locking them to the pre-change period.

How are accounting periods treated when they straddle a change of ownership under section 683?

When an accounting period straddles the date of ownership change, it is split into two notional accounting periods — one before and one after the change. Any available UK property business loss relief must be applied to each notional period independently, rather than across the full accounting period as a whole.

Can pre-change UK property business losses be carried forward after a company changes ownership?

No. Under section 683, losses from a UK property business arising in any accounting period beginning before the ownership change cannot be carried forward into a post-change accounting period. They also cannot be treated as arising in a post-change period for property loss relief purposes. The new owners inherit the business but not its historic losses.

Can you give an example of how section 683 applies in practice?

If a company makes a £200,000 property loss before an ownership change on 1 July 2024, the straddling accounting period is split into pre-change and post-change notional periods. The pre-change loss cannot be carried forward into the post-change period or any later period, so the new owners cannot use it to reduce taxable profits.

Corporation Tax Act 2010 section 683

Disallowance of UK property business losses

Section 683 restricts the ability of a company to use losses from its UK property business where there has been a change in ownership of the company.

Where a company changes ownership, relief for UK property business losses made before the change is restricted.
Any relief available must be considered separately for each notional accounting period (the periods either side of the ownership change within a straddling accounting period).
Losses arising in an accounting period beginning before the change in ownership cannot be carried forward to any accounting period ending after the change.
Those pre-change losses also cannot be treated as arising in any post-change accounting period for the purposes of property loss relief.

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