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This guidance note provides details of the potential restriction that may arise in respect of certain losses on a change in ownership of a company with investment business. The restrictions are very similar to those which apply in respect of trading losses. See the Trading losses and anti-avoidance guidance note for more information.

There are various conditions relating to the change in ownership of an investment company which, if met, will result in potential restrictions to the excess management expenses, qualifying charitable donations and non-trading losses that have arisen prior to the change. The purpose of this legislation is to ensure that companies are not ‘traded’ just so a tax advantage can be obtained, such as accessing a company’s tax losses.

Please refer to the following guidance notes for general details about the utilisation of these types of losses:

1. •

   Excess management expenses

2. •

   Non-trading deficits on loan relationships

3. •

   Losses on non-trade intangibles

4. •

   Property business losses for companies

The conditions which lead to the potential restrictions under the