What does section 953 of the Corporation Tax Act 2010 do?

Section 953 ensures that when a trade is transferred more than once before the ownership condition is first met, the chapter governing the original transfer also applies to each subsequent transfer. Each successor becomes the predecessor for the next transfer, and computational rules cascade across the entire chain of transfers within the specified period.

What conditions must be met for section 953 to apply to a further transfer of a trade?

The original transfer must satisfy both the ownership condition and the tax condition. The further transfer must occur before the end of the specified period, and the ownership condition must only have been met on or after the date of the further transfer. Additionally, the chapter would not otherwise apply to the further transfer without this section.

How are predecessor and successor references extended under section 953?

When applying sections 944 to 950 to the original transfer, references to the successor include the successor from any further transfer. Conversely, when those sections apply to the further transfer, references to the predecessor include the predecessor from the original transfer. This ensures adjustment rules work correctly across the full chain.

What is the specified period for the purposes of section 953 CTA 2010?

The specified period begins at the time of the original transfer of the trade and ends immediately after the earliest time at which the ownership condition was first met in respect of that original transfer. Any further transfer occurring within this window is caught by the cascading provisions of this section.

Corporation Tax Act 2010 section 953

Application of Chapter to further transfers of a trade

Section 953 ensures that when a trade is transferred more than once within a specified window, the same rules that apply to the original transfer also extend to each subsequent transfer in the chain.

Where an original transfer of a trade meets the ownership and tax conditions, and the trade is then transferred again to a third company before the ownership condition is first satisfied, this chapter applies to both transfers
For the further transfer, the original successor becomes the predecessor and the third company becomes the new successor
References to the successor in relation to the original transfer are extended to include the successor from the further transfer, and references to the predecessor in a further transfer are extended to include the predecessor from the original transfer
This cascading treatment applies repeatedly if the trade continues to pass from one company to another before the end of the specified period, which runs from the date of the original transfer to the earliest time the ownership condition is met

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