Corporation Tax Act 2010 section 701

Disallowance of overseas property business losses

Section 701 restricts the ability of a company to use losses from an overseas property business that arose before a change in ownership to reduce profits arising after that change.

• This section limits relief under section 66 for losses made in an overseas property business before a change in company ownership.
• The restriction only applies where chargeable gains or non-trading chargeable realisation gains are included in the company's total profits for the period in which the relevant gain accrues.
• Pre-change losses from the overseas property business cannot be set against the portion of post-change business profits that represents the relevant gain.
• The effect is to prevent a company's new owners from sheltering certain post-acquisition gains with losses that were generated under the previous ownership.