The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
It is often necessary to transfer a trade between companies under common ownership before or after a company sale or acquisition, or as part of a general group restructuring operation.
The succession to trade rules enable trades to be transferred under common 75% ownership with the ability to carry forward tax losses into the successor company and a tax-neutral transfer for capital allowance purposes. The transfer of a trade between group members is commonly also referred to as a ‘hive down’, ‘hive up’ or ‘hive across’.
The losses transferred to the successor company can be utilised as follows:
CTA 2010, ss 944, 944A
From 1 April 2017, terminal loss cannot be claimed by the predecessor where that loss was made in the transferred trade. This restriction does not apply to pre-1 April 2017 trading losses carried forward where the trade was transferred before 13 July 2017.
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