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Change in ownership and group relief for pre-acquisition carried forward losses

On a change of ownership (D1.1125), pre-acquisition carried forward losses cannot be surrendered into the new group for a period of five years following the change in ownership¹.

This restriction applies not only to the transferred company, but also to any company which is related to the transferred company both immediately before and after the change in ownership².

Companies are related to each other if they are members of the same group or consortium (as defined for group relief for carried forward losses; see D2.205)³. Note, there is no restriction on other companies within the group from surrendering losses incurred in any period to transferred or co-transferred companies. Also where companies are transferred together as a group, they can continue to surrender losses etc between each other for the five year period — they are just restricted from surrendering pre-acquisition losses to other group members⁴.

Example

Companies A and B (who