A recent First-tier Tribunal ruling suggests that loss streaming may not be necessary where a loss making trade is transferred without a change of ownership, provided that the successor carries on the whole of the transferred trade as part of its activities. This is contrary to existing HMRC practice and, if confirmed, may offer additional flexibility when structuring acquisitions and internal reorganisations. The case considers the law before the 2010 rewrite, and that rewrite may impact the analysis. Taxpayers who have previously undertaken transfers of loss making trades may wish to consider the impact on their tax return position.
