Losses and changes in ownership
You'll learn how loss relief restrictions work when a company changes ownership and fundamentally alters its business operations.
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In this lesson
- 0:00 Losses and change in ownership restriction
- 0:26 Why loss relief restrictions apply
- 1:09 Timeline for ownership and trade changes
- 1:32 Examples of major trade changes
- 2:05 Terry's tractor dealership scenario
- 2:46 How anti-avoidance rules apply
About this lesson
This lesson covers the anti-avoidance rules that prevent loss-making companies from being purchased solely to offset historical losses against new profits, and how to identify when these restrictions apply. You'll explore what constitutes a major change in the nature or conduct of trade, the five-year lookback period that triggers these restrictions, and how losses are ring-fenced between pre- and post-ownership periods. This is essential knowledge for corporation tax planning in Advanced Taxation (ATX) and Strategic Business Reporting (SBR), particularly when dealing with acquisition scenarios and loss relief claims in your case studies and exam questions.
Duration: 3m
Transcript
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