John Angood and James Hewitt (BDO) provide a back to basics guide.
A common theme throughout corporate transactions is the availability of a company’s tax losses within the target following the acquisition. Understanding the nuances of how changes in ownership and business operations affect the utilisation of brought forward and current trading and non-trading losses is crucial both in transaction negotiations and in filing post-acquisition tax returns.
In considering whether a trading company’s losses may be affected a number of elements must be present a change in ownership (CIO) and either:
a major change in the nature or conduct of trade (MCINOCOT) or business (MCINOCOB); or
the activities of the trade become small or negligible.
Legislative references throughout this article are to CTA 2010 unless otherwise stated.
What is a change in ownership?
A change in ownership as defined in CTA 2010 Part 14...
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John Angood and James Hewitt (BDO) provide a back to basics guide.
A common theme throughout corporate transactions is the availability of a company’s tax losses within the target following the acquisition. Understanding the nuances of how changes in ownership and business operations affect the utilisation of brought forward and current trading and non-trading losses is crucial both in transaction negotiations and in filing post-acquisition tax returns.
In considering whether a trading company’s losses may be affected a number of elements must be present a change in ownership (CIO) and either:
a major change in the nature or conduct of trade (MCINOCOT) or business (MCINOCOB); or
the activities of the trade become small or negligible.
Legislative references throughout this article are to CTA 2010 unless otherwise stated.
What is a change in ownership?
A change in ownership as defined in CTA 2010 Part 14...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
