On 7 December 2015, the Government announced a package of measures designed to incentivise and reward innovation as part of its National Innovation and Science Agenda. One of those measures will allow businesses that have changed ownership to access past year tax losses if they satisfy a similar business test. Under the current law, businesses that have changed ownership must satisfy the same business test to access past year tax losses. This measure will encourage entrepreneurship by allowing loss-making businesses to seek out new opportunities to return to profitability.
The Government has developed draft legislation to implement this measure and is now seeking comments on the proposed legislation and the accompanying explanatory memorandum.