Corporation Tax Act 2010

Supplementary U.K.

951 Part of trade treated as separate trade U.K.

(1) Subsection (2) applies (subject to subsection (5)) if—

(a) a company (“the transferor”) ceases to carry on a trade (“trade X”) and another company (“the transferee”) begins to carry on the activities of trade X as part of its trade (“part X”), and

(b) there would have been a transfer of trade X from the transferor to the transferee had the transferee begun to carry on part X as a separate trade.

(2) This Chapter has effect as if the transferee carries on part X as a separate trade.

(3) Subsection (4) applies (subject to subsection (5)) if—

(a) a company (“the transferor”) ceases to carry on a part of a trade (“part Y”) and another company (“the transferee”) begins to carry on the activities of part Y as its trade or as part of its trade, and

(b) there would have been a transfer of a trade (including as a result of subsection (2)) from the transferor to the transferee had the transferor been carrying on part Y as a separate trade.

(4) This Chapter has effect as if the transferor had carried on part Y as a separate trade.

(5) Subsections (2) and (4) are to be ignored for the purposes of sections 941(3) and (4) and 943(3).

(6) If part of a trade is treated as a separate trade in accordance with subsection (4)—

(a) references in section 945(2) to liabilities are to be read as references to liabilities apportioned under section 952, and

(b) references in section 945(3) to assets are to be read as references to assets so apportioned.

[F1 (7) Subsection (8) applies if—

(a) a company (“the transferor”) ceases to carry on a trade (“trade Z”),

(b) another company (“the transferee”) begins to carry on the activities of trade Z as part of its trade (“part Z”) and

(c) by reason of this Chapter an amount of a loss made in trade Z is carried forward under section 45A(4), 45B(2), 303B(2) or 303D(3) to an accounting period of the transferee.

(8) The provisions of sections 45A to 45F and 303B to 303D have effect, in so far as they apply (or re-apply) in relation to the amount carried forward (or any part of it), as if the transferee carries or carried on part Z as a separate trade.]

Textual Amendments

F1 S. 951(7)(8) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 67(2)

952 Apportionment if part of trade treated as separate trade U.K.

(1) If part of a trade is treated as a separate trade in accordance with section 951(2)[F2 , (4) or (8)], just and reasonable apportionments are to be made of receipts, expenses, assets and liabilities.

(2) Subsection (3) applies if—

(a) at the time of an apportionment under subsection (1) it appears that the apportionment is material to the liability to tax (for whatever period) of two or more companies, and

(b) a question arises as to how the apportionment is to be made for the purposes of the liability of those companies.

(3) The question is to be determined in the same way as an appeal, and all the companies concerned are entitled to be a party to the proceedings.

Textual Amendments

F2 Words in s. 952(1) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 68

953 Application of Chapter to further transfers of a trade U.K.

(1) This section applies if—

(a) there is a transfer of a trade (“the original transfer”) that meets the ownership condition and the tax condition (see sections 941 and 943),

(b) after the original transfer there was a further transfer of the trade from the successor in relation to the original transfer to a third company (“the further transfer”),

(c) the further transfer took place at any time before the end of the period specified in subsection (7),

(d) the ownership condition was met in relation to the original transfer only on or after the further transfer, and

(e) apart from this section, this Chapter would not apply to the further transfer.

(2) This Chapter applies to the further transfer as well as to the original transfer.

(3) In the application of this Chapter to the further transfer—

(a) the successor in relation to the original transfer is taken to be the predecessor in relation to the further transfer, and

(b) the third company is taken to be the successor in relation to the further transfer.

(4) In the application of sections 944 to 950 in relation to the original transfer, references to the successor include references to the successor in relation to the further transfer.

(5) In the application of those sections in relation to the further transfer, references to the predecessor include references to the predecessor in relation to the original transfer.

(6) If, at a time before the end of the period specified in subsection (7), the transferred trade was transferred from the successor in relation to the further transfer to another company, subsections (2) to (5) and this subsection apply again in a like manner (and so on).

(7) The period referred to above is the period—

(a) beginning at the time when the original transfer takes place, and

(b) ending immediately after the earliest time when the ownership condition was met in respect of the original transfer (see section 941(1)).