CTM04730 - Corporation Tax: trading losses: relief against total profits: restrictions for farming companies: commencement and cessation

ICTA88/S397 ( CTM04710) does not deny relief under ICTA88/S393A (1) where a company's trade of farming or market gardening was set up and commenced within the period of five years before the beginning of the accounting period for which relief is claimed.

However where:

• the company has succeeded to the trade, and
• the predecessor's trade has not been treated as discontinued for the purposes of capital allowances and charges because of ICTA88/S343 (2),

the trade is treated as a continuous trade for Section 397 purposes.

There are instructions on ICTA88/S343 at CTM06000 onwards which deal with company reconstructions without change of ownership. See BIM75635 for companies controlled by a husband and/or wife where a trade transferred between the parties is a continuous trade.