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Corp Tax Losses - Acquisition

Corp Tax Losses - Acquisition

Start up technology company has tax losses from start of trading - looking to sell the business (core technology / customer base has value to others). Potetial buyers are trade sales or end customer

What are key considerations on tax losses in company with regards to utilisation after sale. 

eg if acquirer has business in same trade with taxable profits, can they group relieve the losses and carry back ......



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22nd Feb 2012 08:48


You say "can they group relieve the losses and carry back".... you can only use group relief to offset current year profits.  So I'm not sure what you're getting at.  If you have a December accounting period, and the purchaser buys this company on 1 July, then only 6/12ths of the current year losses could be surrendered as group relief.  The brought forward losses couldn't be surrendered - they are restricted against profits from the same trade in that company.

Also look out for major change in the nature or conduct of the trade - that could prevent the c/fwd losses from being utilised in future.

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