Commentary

D9.119 Negative filter

Corporate tax
Corporate tax | Commentary

D9.119 Negative filter

Corporate tax | Commentary

D9.119 Negative filter

These provisions apply for income tax purposes. For details of the corporation tax regime see D9.102A–D9.116.

As previously noted, a negative filter is one intended to take a person outside the scope of the legislation. As well as being helpful to taxpayers, this is a resource saving for HMRC, as they should no longer have to review so many clearance applications. The negative filter in the current income tax rules for transactions in securities is the 'fundamental change of ownership' test1.

The fundamental change of ownership test: post 6 April 2016

For transactions in securities occurring on or after 6 April 2016 the focus of the 'fundamental change in ownership' rule changed. From this date the rule considers what the original shareholders of the company still hold after the transaction(s), rather than considering the new ownership structure2.

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