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IA 10: Amended assessments
or “How changing past tax assessments affects your tax losses”
You could also call this:

“This provision explains why companies can carry forward tax losses to support growth and adaptation”

This law explains why companies are allowed to carry forward their tax losses, even if they don’t meet the usual ownership requirements. The main goal is to help companies grow and adapt without being held back by tax rules.

You can carry forward tax losses to:

  1. Encourage new ideas and help the economy grow
  2. Make it easier for companies to reorganise
  3. Allow changes in who owns the company, directly or indirectly
  4. Help companies get new investors
  5. Let companies change what they do to grow or become stronger

However, the law also says that this shouldn’t be used to avoid paying taxes by buying ownership in other companies just to use their tax losses.

If you want to know more about the specific rules for carrying forward tax losses, you can check section IA 5. For information about arrangements involving tax losses, look at sections GB 3BA to GB 3BAC.

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Next up: IB 2: Meaning of ownership continuity breach

or “When a company changes ownership too much and can't use past tax losses”
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Part I Treatment of tax losses
Carrying forward companies’ loss balances: continuity of business activities

IB 1Purpose

  1. The purpose of this subpart and sections GB 3BA to GB 3BAC (which relate to arrangements involving tax losses) is—

  2. to enable companies to carry forward tax loss components in loss balances despite not meeting the requirements for continuity of ownership of section IA 5 (Restrictions on companies’ loss balances carried forward: continuity of ownership), in order to reduce impediments to—
    1. innovation and economic growth:
      1. corporate reorganisations:
        1. changes in the direct or indirect ownership of companies:
          1. companies accessing new sources of share capital:
            1. companies adapting their business activities in order to grow or be resilient; but
            2. not to encourage tax avoidance arrangements involving the acquisition of ownership interests in companies.

              Notes
              • Section IB 1: inserted (with effect on 1 April 2020), on , by section 99(1) (and see section 99(2) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).