Corporation Tax Act 2010 section 80

Ceasing to meet trading requirement because of administration etc

Section 80 explains how the trading requirement (needed for share loss relief) is affected when a company or its subsidiaries enter administration, receivership, or winding up, and sets out the conditions under which the company is or is not treated as ceasing to meet that requirement.

• A company does not cease to meet the trading requirement merely because of actions taken as a consequence of the company or any of its subsidiaries being in administration or receivership, provided the entry into that process and all resulting actions are for genuine commercial reasons and not primarily motivated by tax avoidance.
• However, a company will cease to meet the trading requirement if, before the relevant time for the purposes of section 78(2), a resolution is passed or order made for the winding up of the company or any of its subsidiaries, or the company or any subsidiary is dissolved without winding up.
• The winding-up rule does not apply if the winding up is for genuine commercial reasons (and not part of a tax avoidance scheme) and the company continues to be a trading company throughout the winding-up process.
• References to a company being "in administration" or "in receivership" in this section take their meaning from section 252 of the Income Tax Act 2007.