Speed Read: It has long been possible to effectively 'sell' unused capital allowances in a loss-making company. In summary, a company would disclaim capital allowances. Following its acquisition by a new group, the company would claim allowances to generate or augment a loss which could be surrendered by way of group relief. FA 2010 Sch 4 enacts legislation to close this perceived loophole. From 9 December 2009, where tax avoidance is intended, new rules introduce the concept of an 'excess of allowances' and create a 'new pool'. Amongst other restrictions, future losses arising from new pools cannot create a loss available for group relief.
