Corporation Tax Act 2010

Marginal relief

19 Marginal relief

(1) This section applies if—

(a) a company is UK resident in an accounting period,

(b) it is not a close investment-holding company in the period,

(c) its augmented profits of the accounting period—

(i) exceed the lower limit, but

(ii) do not exceed the upper limit, and

(d) its augmented profits of the period do not include any ring fence profits.

(2) The corporation tax charged on the company’s taxable total profits of the accounting period is reduced by an amount equal to—

where—

• F is the standard fraction,

• U is the upper limit,

• A is the amount of the augmented profits, and

• N is the amount of the taxable total profits.

(3) In this Part “the standard fraction” means the fraction set by Parliament as the standard fraction for the purposes of this Part.

20 Company with only ring fence profits

(1) This section applies if—

(a) a company is UK resident in an accounting period,

(b) it is not a close investment-holding company in the period,

(c) its augmented profits of the accounting period—

(i) exceed the lower limit, but

(ii) do not exceed the upper limit, and

(d) its augmented profits of the period consist exclusively of ring fence profits.

(2) The corporation tax charged on the company’s taxable total profits of the accounting period is reduced by an amount equal to—

where—

• R is the ring fence fraction,

• U is the upper limit,

• A is the amount of the augmented profits, and

• N is the amount of the taxable total profits.

(3) In this Part “the ring fence fraction” means the fraction set by Parliament as the ring fence fraction for the purposes of this Part.

21 Company with ring fence profits and other profits

(1) This section applies if—

(a) a company is UK resident in an accounting period,

(b) it is not a close investment-holding company in the period,

(c) its augmented profits of the accounting period—

(i) exceed the lower limit, but

(ii) do not exceed the upper limit, and

(d) its augmented profits of that period consist of both ring fence profits and other profits.

(2) The corporation tax charged on the company’s taxable total profits of the accounting period is reduced by the total of—

(a) the sum equal to the ring fence fraction of the ring fence amount, and

(b) the sum equal to the standard fraction of the remaining amount.

(3) In this Part “ring fence profits” has the same meaning as in Part 8 (see section 276).

22 The ring fence amount

(1) In section 21 “the ring fence amount” means the amount given by the formula—

(2) For the purposes of this section—

• UR is the amount given by multiplying the upper limit by—

  

• AR is the total amount of any ring fence profits that form part of the augmented profits of the accounting period,

• NR is the total amount of any ring fence profits that form part of the taxable total profits of the accounting period, and

• A is the amount of the augmented profits of the accounting period.

23 The remaining amount

(1) In section 21 “the remaining amount” means the amount given by the formula—

(2) For the purposes of this section—

• UZ is the amount given by multiplying the upper limit by—

  

• AZ is the total amount of any profits other than ring fence profits that form part of the augmented profits of the accounting period,

• NZ is the total amount of any profits other than ring fence profits that form part of the taxable total profits of the accounting period, and

• A is the amount of the augmented profits of the accounting period.