FA 2015: Loss refreshing

Finance Act 2015 contains a new targeted anti-avoidance rule (TAAR) that is designed to counteract arrangements under which certain carried forward losses are used to generate other losses or deductions which for corporation tax purposes can be used more flexibly. The new TAAR is found in FA 2015 Sch 3 which introduces a new Part 14B into CTA 2010.

The problem

UK tax legislation often permits tax losses and reliefs which cannot be used effectively in the period in which they arise to be carried forward and set against profits arising in a subsequent period. So for example:

• CTA 2010 s 45 gives relief to a company carrying on a trade for carried forward unrelieved trading losses...