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ID 5: Pre-consolidation losses on exit: part-year rule
or “Rules for carrying forward losses when a company leaves a consolidated group during a tax year”
You could also call this:

“When tax loss rules apply to company amalgamations”

This part of the law applies in two situations when companies join together (amalgamate):

  1. If the company that’s joining or the company it’s joining with had a tax loss before they joined. A tax loss is when a company owes less tax than usual or no tax at all because it didn’t make much money.

  2. If a company that’s part of a group of companies has a tax loss in the same year the companies are joining. This tax loss can be used by the new, joined company to lower the amount of tax it needs to pay.

These rules help figure out what happens to tax losses when companies join together.

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Next up: IE 2: Treatment of tax losses by amalgamating company

or “How unused tax losses can be shared when companies merge”
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Part I Treatment of tax losses
Treatment of tax losses on amalgamation of companies

IE 1When this subpart applies

  1. This subpart applies if, in an amalgamation,—

  2. either the amalgamating company or the amalgamated company has, before the date of the amalgamation, a tax loss component or ring-fenced tax loss:
    1. a company that is part of a group of companies has a tax loss for the tax year of amalgamation that may be made available to the amalgamated company to subtract from its net income for the tax year.

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