16(1)Sub-paragraphs (2) and (3) apply if the seller makes a loss in a trade in an accounting period.U.K.
(2)For the purposes of section 37(3)(b) of CTA 2010 (including for the purposes of that provision as it has effect under the other trade loss relief provisions), the seller's total profits of a pre-transfer accounting period are treated as being—
(a)the seller's total profits for that period, less
(b)the transferred profits amount for that period.
(3)For the purposes of section 42 of CTA 2010, the seller's profits of a ring fence trade of a pre-transfer accounting period are treated as being—
(a)the seller's ring fence profits for that period, less
(b)the transferred profits amount for that period.
17U.K.The transferred profits amount for an accounting period is to be disregarded for the purposes of the application of any provision of the Corporation Tax Acts by reference to which the seller would (apart from this paragraph) be entitled to relief from, or a repayment of, corporation tax.
18(1)Paragraphs 16 and 17 are subject to this paragraph.U.K.
(2)If, on or after the licence transfer date, the seller's eligible ring fence profits for a pre-transfer accounting period are reduced to an amount which is lower than the transferred profits amount for that period—
(a)the seller is treated as incurring a loss in a ring fence trade, of an amount equal to the difference, for the accounting period, and
(b)paragraph 17 does not apply to the difference.