Corporation Tax Act 2010 section 949

Dual resident investing companies

Section 949 prevents a successor company from benefiting from the trade transfer reliefs under section 948 if it is a dual resident investing company in the accounting period when the trade transfer takes place.

• The capital allowance and other reliefs available under section 948(1) to (4) on a trade transfer without change of ownership do not apply if the successor company is a dual resident investing company in the transfer accounting period.
• A dual resident investing company is one that is both UK resident and subject to tax in another territory (because it derives its corporate status there, is managed there, or is otherwise treated as resident there), and that also meets one of three conditions relating to its trading or investment activities.
• The three conditions are: the successor is not a trading company throughout the transfer accounting period; or it carries on a trade whose main function involves investment holding, loan relationship payments, charitable donations, similar deductible payments, or raising funds for those activities; or it carries on one or more of those activities to an extent or for a purpose not justified by any trade it conducts.
• A trading company is one whose business consists wholly or mainly of carrying on a trade or trades, and the transfer accounting period is the successor's accounting period in which the trade transfer occurs.