Corporation Tax Act 2010 section 948

Modified application of CAA 2001

Section 948 explains how capital allowances rules are modified when a trade is transferred without a change of ownership, ensuring the successor company steps into the predecessor's shoes for capital allowances purposes.

• When a trade is transferred, any capital allowances or balancing charges that would have applied to the predecessor are instead made to or on the successor company.
• The transfer of assets used in the trade from the predecessor to the successor does not, by itself, trigger any capital allowances or balancing charges.
• The successor is treated as if it had been carrying on the trade since the predecessor first started it, and anything done to or by the predecessor is treated as done to or by the successor.
• These rules are subject to further modifications for dual resident investing companies (section 949) and transfers involving plant or machinery leasing businesses (section 950), as well as certain cross-border transfers.