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FO 8: Bad debts and expenditure or loss on resident’s restricted amalgamation
or “Tax deductions for bad debts and losses when companies merge”
You could also call this:

“Unused prepaid expenses can be transferred when companies merge”

When a company stops existing because it joins with another company, it might have some money it already paid for something but hasn’t used yet. This is called prepaid expenditure. If this happens, the new company that’s formed after joining gets to use the leftover prepaid money. The amount of leftover money is figured out using section EA 3. This rule helps make sure the money isn’t wasted when companies join together.

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Next up: FO 10: When property passes on resident’s restricted amalgamation

or “Property transfer rules when companies combine”
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Part F Recharacterisation of certain transactions
Amalgamation of companies

FO 9Unexpired portion of prepaid expenditure

  1. If an amalgamating company ends its existence on amalgamation, the unexpired portion under section EA 3 (Prepayments) of an amount of expenditure of the amalgamating company for the income year of amalgamation is treated as the amalgamated company’s unexpired amount of the expenditure.

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