The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Following the extensive changes to the loss carry forward provisions introduced from 1 April 2017, the anti-avoidance rules restricting the offset of trading losses following a change in ownership were tightened up and extended. Consequently there are now two potential restrictions that need to be considered when offsetting trading losses following a change in ownership of a standalone company.
The legislation sets out the order of priority; only where the first test does not apply should the second test be considered.
There are also restrictions on the offset of trading losses, if after the change in ownership the company acquires an asset from a group company on a no-gain / no loss basis. Also, after a change in ownership, members of the company’s new group cannot claim group relief for any of the company’s carried-forward pre-acquisition losses in the following five years.
Relief for trading losses in a subsequent or previous period is not allowed in the following circumstances:
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