Corporation Tax Act 2010 section 944A

Modified application of section 45A

Section 944A deals with how post-April 2017 trade losses that have not been relieved by the predecessor company can be carried forward and used by the successor company when a trade is transferred.

• When a non-ring-fence trade is transferred and the predecessor made a loss in its final accounting period (beginning on or after 1 April 2017), the unreleved portion of that loss can be carried forward to the successor under the section 45A rules
• The loss must not have already been relieved under sideways relief or group relief, and must not have been blocked by anti-avoidance provisions
• Where losses from earlier periods had already been carried forward to the predecessor's final accounting period under section 45A, any remaining unrelieved balance of those losses can also pass to the successor
• In both cases, the successor must be carrying on the transferred trade on a commercial basis — if it would fail that test, the losses cannot transfer