Corporation Tax Act 2010 section 944

Modified application of section 45

Section 944 deals with how pre-April 2017 trade losses can be carried forward and relieved against future trade profits when a trade is transferred to a successor company without a change of ownership.

• When a trade is transferred under this Chapter, the successor company can carry forward pre-1 April 2017 trade losses made by the predecessor against subsequent profits of that trade, provided the predecessor would have been entitled to the same relief had it continued the trade itself.
• The loss must have been incurred by the predecessor in the transferred trade, and the predecessor must have qualified for carry-forward relief under section 45 had it not ceased the trade.
• The amount of loss available to the successor is reduced by any claims already made by the predecessor — specifically, claims for sideways relief against total profits under section 37 (including extended ring-fence relief under section 42), and terminal loss relief claims under section 45F as modified by section 944C.
• The relief is also subject to section 945, which restricts loss relief where the predecessor retains more liabilities than assets on the transfer.