Taxes Consolidation Act 1997 Schedule 9 paragraph 1

Change in ownership of company

Schedule 9, paragraph 1 defines when a change in the ownership of a company occurs for the purposes of the loss-buying rules in section 401 and the exploration company rules in section 679(4).

• A change of ownership occurs if a single person acquires more than 50% of a company's ordinary share capital.
• It also occurs if two or more persons, each acquiring at least 5%, together acquire more than 50% of the ordinary share capital.
• Where two or more persons are involved, a holding of less than 5% is ignored unless, combined with an existing holding, it brings the total to 5% or more.
• These rules apply to the restriction on use of trading losses after a change of ownership (section 401) and to unrelieved losses of an exploration company that changes ownership around the time it begins to trade (section 679(4)).