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IA 5: Restrictions on companies’ loss balances carried forward: continuity of ownership
or “Companies must maintain 49% ownership to carry forward tax losses”
You could also call this:

“Rules for companies sharing tax losses within a group”

If you’re part of a group of companies and you want to use a tax loss, you need to follow some rules. You can only use the tax loss if you meet the requirements set out in section IC 5. This section explains what Company B needs to do to use Company A’s tax loss.

If you’re part of a consolidated group of companies, there are special rules for grouping tax losses. These rules are explained in subpart ID.

Sometimes, the government might think that a company is trying to avoid these rules. If this happens, section GB 4 might be used. This section could say that a company doesn’t meet the requirements, even if it looks like it does.

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Next up: IA 7: Restrictions relating to ring-fenced tax losses

or “Special rules limit the use of certain types of tax losses”
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Part I Treatment of tax losses
General rules for tax losses

IA 6Restrictions on companies grouping tax losses

  1. A company that is part of a group of companies may use under section IA 3(2) a tax loss under subpart IC (Grouping tax losses) only if it meets the requirements of section IC 5 (Company B using company A’s tax loss).

  2. Subpart ID (Use of tax losses by consolidated groups) applies to the grouping of tax losses by a consolidated group of companies.

  3. Section GB 4 (Arrangements for grouping tax losses: companies) may apply to treat a company as not meeting the requirements referred to in subsection (1).

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Notes
  • Section IA 6(1): amended (with effect on 1 April 2008), on , by section 58(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).