Ring fence losses and qualifying E&A lossesU.K.
[F117(1)Where—
(a)in any post-commencement period (“the period of the loss”) a qualifying company carrying on a ring fence trade incurs a loss in the trade, and
(b)some or all of the loss falls to be set off under section 393 against trading income from the trade in succeeding accounting periods,
so much of the loss as falls to be so set off is a “ring fence loss” of the company.
(2)In determining for the purposes of this Part of this Schedule how much of a loss incurred in a ring fence trade falls to be set off as mentioned in sub-paragraph (1)(b), it shall be assumed—
[F2(a)]that every claim is made that could be made by the company under section 393A to set losses incurred in the ring fence trade against ring fence profits of earlier post-commencement periods, [F3and
(b)that (where appropriate) section 393B applies in relation to every such claim.]
(3)So much of a ring fence loss as is attributable to qualifying E&A allowances for the period of the loss is a “qualifying E&A loss”.
(4)A ring fence loss is attributable to qualifying E&A allowances to the extent that the amount of the ring fence loss does not exceed the amount of the qualifying E&A allowances for the period of the loss.
(5)But a claim for post-commencement supplement may include an election for a ring fence loss to be treated—
(a)as attributable to qualifying E&A allowances for the period of the loss to such lesser extent as may be specified in the election, or
(b)as not attributable to such allowances.
(6)“Qualifying E&A allowances”, in the case of an accounting period, means allowances for that period under Part 6 of the Capital Allowances Act in respect of qualifying E&A expenditure incurred by the company (including any pre-commencement supplement treated under paragraph 9(2) as such an allowance).
(7)This paragraph has effect for the purposes of this Part of this Schedule.]
Textual Amendments
F1Sch. 19B inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 286(3), Sch. 38
F2Words in Sch. 19B para. 17(2) renumbered as para. 17(2)(a) (with effect in accordance with 111(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 35 para. 8(3)(a)
F3Sch. 19B para. 17(2)(b) and preceding word inserted (with effect in accordance with 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 8(3)(b)