You are correct that Part 5A, Chapter 2, CTA 2010 allows for certain carried forward losses of a company to be surrendered to group companies if they have arisen after 1 April 2017.
There are however restrictions in Part 14, Chapter 2C, CTA 2010 to claims that would otherwise qualify for relief under Part 5A – specifically s676CB CTA 10.
Subject to certain exceptions, the general rule is that a claim for group relief for carried forward losses after a change in ownership is not available for ‘pre-acquisition losses’ i.e. losses arising after 1 April 2017 but before the change of ownership.
There is an exception to this rules, s676CE(1) CTA 10 allows for group relief for carried forward losses against total profits of a claimant company if they arise after the 5th anniversary of the end of the accounting period of the transferred company in which the change of ownership occurred.
For these purposes, the accounting period in which the change of ownership occurred is treated as two separate accounting periods. The first ending with the date of the change of ownership, and the second consisting of the remainder of that period (s676CG CTA 2010).
This would mean that qualifying carried forward losses in the company your client has acquired would be available to relieve against profits arising in accounting periods of other group companies 5 years after acquisition.
It should be noted that this restriction applies to loss making companies joining a group. If a profitable company were to join a group, other companies within that group may surrender carried forward losses incurred in a prior period.
See CTM06815 for HMRC guidance on this point.
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