Corporation Tax Act 2010 (c. 4)

Part 22 U.K. Miscellaneous provisions

Chapter 1 U.K. Transfers of trade without a change of ownership

Effect of Chapter in relation to transfers to which it applies U.K.

945 Cases in which predecessor retains more liabilities than assets U.K.

(1) This section applies if L exceeds A.

(2) “L” is the amount of the predecessor's liabilities so far as they—

(a) are outstanding immediately before the transfer of the transferred trade, and

(b) are not transferred to the successor on the transfer of the trade.

(3) “A” is the sum of the values of—

(a) the predecessor's assets immediately before the transfer of the transferred trade so far as they are not transferred to the successor on that transfer, and

(b) the consideration given to the predecessor by the successor in relation to the transfer of the transferred trade.

(4) The relief to be given to the successor as a result of [F1 sections 944 to 944E] is limited to—

where—

R is the total amount of loss for which relief could be given to the successor as a result of [F1 sections 944 to 944E], ignoring this section, and

E is the amount by which L exceeds A.

(5) If R does not exceed E, no relief is to be given to the successor.

Textual Amendments

F1 Words in s. 945(4) 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. 66