However, in the event of a change in the ownership of a company which has a 75 per

cent subsidiary, owner cither directly or indirectly, it is treated as if the change had taken
place in the ownership of the subsidiary unless the change in the ownership of the patent is to
be disregarded as above stated.

Where the provision operate to restrict relief by reference to a change of ownership at

any time, no circumstances of transactions before that time can be considered in decided in
deciding whether or not there has been a change of ownership.

Accumulated advance paiyments of corporation tax the introduction of the imputation

system of comporation tax has made it necessary to make provisions designed to render it
unprofitable to buy companies in order to obtain the benefit of accumulated advance
payments of comporation tax. The relative provisions operate in the same circumstances as
outline above ; but in this case a major change in the nature or conduct of a trade or business
includes also a change whereby the company ceases to be a tranding company and becomes
an investment company or vise versa,or in the case of an investment company, a major
change occurs in its investment.

The benefit of surplus advance corporation tax brought forward fro, an accounting
period prior to the change of ownership in such circumstances is denied, and the provision in
respect of set off, collection, etc. of corporation tax apply as if an accounting period ended
and a new one commended on the change of ownership. The provisions apply to advance
payments of corporation tax surrendered to a subsidiary by its principal company in a group
as well as to that paid by the company itself. The same supplementary provisions apply as in
the disallowance of losses as under the earlier provisions.

CONTINUITY OF RELIEF FOR CAPITAL ALLOWANCER AND LOSSES ON

COMPANY RECONSTRUCTION WIITHOUT CHANGE OF OWNERSHIP.

Continuity of relief for losses and capital allowances is avaible where a company carries on a
trade after its discontinuance by another company and:

a. On or within two years of the change, the trade or at least three-fourths interest in it
belongs to the same person as the trade or the relevant interest in it belonged to as
some time within a year before the change and
b. The trade is not within the above comporative period carried on except by a company
which is within the change to tax in respect of it.
In both of the above cases, references to the trade apply also to any other trade of which the
activities comporise those of the trade taken over.

The requirements as to common ownership may be met in one of two ways, by

references either.

i. In proportion to the holdings of ordinary share capital by persons (individuals or

companies) in the companies; or
ii. In the case of a 75 per cent subsidiary company, in proportion to the ordinary shares
held by its parent company, or by that company’s ordinary shareholder-for this
porpose, participating preference shares rank at ordinary share capital