Lee Sharpe looks at the rules for a transfer of trade under common ownership.
There is a regime that allows trading losses to be transferred from one company to another, alongside the trade. It commonly arises:
- when a trade is transferred within a group of companies, perhaps allowing common activities to be pooled in the donee company while the donor company ‘withers on the vine’.
- when an owner-managed or family company fails but the underlying trading activity is resurrected under a successor company.
Many readers will be familiar with the provisions of ICTA 1988, s 343. Its successor is comprised in the first 2 Chapters of CTA 2010, Pt 22 (CTA 2010 s 940A et seq.). The treatment is mandatory (i.e. no claim or election is required); in many cases, it will provide scope
