Corporation Tax Act 2010 section 702

Apportionment of amounts

Section 702 sets out the rules for splitting various tax-related amounts from an actual accounting period into two notional accounting periods when a change of company ownership occurs.

• Chargeable gains are allocated to the second notional period up to the amount of the relevant gain, with any excess going to the first notional period.
• Loan relationship profits, deficits, capital allowances, and most other amounts are split on a time basis according to the relative lengths of the two notional periods.
• Amounts carried forward from earlier periods — such as non-trading deficits, non-trading losses on intangible fixed assets, and excess management expenses — are allocated entirely to the first notional period.
• If any of the prescribed apportionment methods would produce an unjust or unreasonable result, a just and reasonable alternative method must be used instead.