Corporation tax losses brought forward

Corporation tax losses brought forward

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I have a client who has substantial losses brought forward. They want to split the company in 2 to have the 3d graphics online part of the business seperate from the 3D graphics broadcast part. If one company owned the other or the shareholders were the same for both companies is there anyway that the losses brought forward could be utilsed partly by the existing company and partly by the new company?
Many thanks

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By johngroganjga
18th Aug 2014 15:07

No

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By thisistibi
18th Aug 2014 15:38

Sort of

Depending how the business was split, one company who is keeping all the losses could pay more, or the company not getting the losses could pay less, for the business to take account of the value of the losses.

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Stepurhan
By stepurhan
18th Aug 2014 16:17

Different trade

Tricky at best. You would have to argue that a substantially changed business in the existing company was still carrying on the same trade (as losses can only be offset against profits of the same trade). There is no way they could be used by an entirely separate company no matter what it took on.

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By Exector
18th Aug 2014 16:43

If is a succession to a part trade?

Think there may be some circumstances where could be continuation of relief for properly apportioned losses to a part trade if there has been succession, the companies are in common ownership and the changes represent a pukka re-organisation.  EG See http://www.hmrc.gov.uk/manuals/ctmanual/ctm06060.htm  as a starter for 10.        Addendum- and for a bonus:  http://www.hmrc.gov.uk/manuals/ctmanual/CTM06120.htm

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