Corporation Tax Act 2010 section 725

Provision applying for the purposes of Chapters 2 to 5A

Section 725 sets out supplementary rules that apply across Chapters 2 to 5A, dealing with how previous ownership changes prevent double counting and how the timing of an ownership change is determined when shares or other relevant assets are acquired through contracts or options.

• Once a change in company ownership has triggered a restriction of relief under Chapters 2 to 5A, no earlier transactions or circumstances can be used to establish any further change in ownership
• Where relevant assets (such as ordinary share capital) are acquired under a contract of sale, option, or similar arrangement, the ownership change is treated as occurring when the contract was made or its benefit was assigned — not when the assets were actually transferred
• A person who exercises an option to purchase shares is treated as having purchased those shares at the time they originally acquired the option
• Relevant assets for these purposes means ordinary share capital, or any property or rights that may be taken into account in place of ordinary share capital under sections 721 or 722