Section 945 Cases in which predecessor retains more liabilities than assets
United Kingdom
This section applies if L exceeds A.
“L” is the amount of the predecessor's liabilities so far as they—
are outstanding immediately before the transfer of the transferred trade, and
are not transferred to the successor on the transfer of the trade.
“A” is the sum of the values of—
the predecessor's assets immediately before the transfer of the transferred trade so far as they are not transferred to the successor on that transfer, and
the consideration given to the predecessor by the successor in relation to the transfer of the transferred trade.
The relief to be given to the successor as a result of F1sections 944 to 944E is limited to—
where—
R is the total amount of loss for which relief could be given to the successor as a result of sections 944 to 944E, ignoring this section, and
E is the amount by which L exceeds A.
If R does not exceed E, no relief is to be given to the successor.
Annotations
Textual amendments
- F1
Words in s. 945(4) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 66
Notes on Chapter 1
Modifications
- C1
Pt. 22 Ch. 1 applied (with modifications) (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), Sch. 1 para. 19 (with ss. 15(1), 16(1), 17)
- C2
Pt. 22 Ch. 1 modified (15.5.2024) by S.I. 2009/2971, reg. 4(20) (as inserted by The Mutual Societies (Transfers of Business) (Tax) (Amendment) Regulations 2024 (S.I. 2024/555), regs. 1(1), 2(2)(c) (with reg. 1(2)-(5)))