Corporation Tax Act 2010 section 944B

Modified application of section 45B

Section 944B deals with how trade losses made by, or carried forward to, a predecessor company's final period of trading can be transferred to the successor company when a trade is transferred, applying the carry-forward rules in section 45B.

• Where a predecessor company makes a loss in its final accounting period (beginning on or after 1 April 2017) in a transferred trade, and that loss has not been relieved under other provisions, it can be carried forward to the successor under the section 45B rules
• This applies only where specific conditions are met — for example, sideways relief under section 37 was unavailable due to restrictions, or the trade is a ring fence trade, or the successor's trade would not qualify for sideways relief under section 44
• Where losses were already being carried forward under section 45B into the predecessor's final accounting period but were not fully used to reduce that period's trade profits, the unused balance can also pass to the successor
• In both cases, the section 45B carry-forward mechanism is applied by reading its references to "the company" and "the trade" as referring to the successor and the transferred trade respectively

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