PART X LOSS RELIEF AND GROUP RELIEF
C1C2C3C4CHAPTER II LOSS RELIEF: CORPORATION TAX
Pt. 10 Chs. 1, 2 extended (with effect in accordance with s. 44 of the extending Act) by Finance Act 1998 (c. 36), Sch. 6 para. 2, (with Sch. 6 para. 6)
Pt. 10 Chs. 1, 2 extended (with effect in accordance with s. 64, Sch. 22 paras. 16-18 of the extending Act) by Finance Act 2002 (c. 23), Sch. 22 para. 4(2)(d)
Pt. 10 Ch. 2 modified (1.4.2009 with effect in accordance with s. 1329(1) of the modifying Act) by Corporation Tax Act 2009 (c. 4), s. 39(3) (with Sch. 2 Pts. 1, 2)
Losses from Schedule A business or overseas property business
C5392A Schedule A losses.
1
Where a company incurs a Schedule A loss in an accounting period, the loss shall be set off for the purposes of corporation tax against the company’s total profits for that period.
2
To the extent that a company’s Schedule A loss cannot be set off under subsection (1), it shall, if the company continues to carry on the Schedule A business in the succeeding accounting period, be carried forward to that period and be treated for the purposes of this section as a Schedule A loss of that period.
F13
Where a company with investment business—
a
ceases to carry on a Schedule A business, but
b
continues to be a company with investment business,
any Schedule A loss that cannot be used under the preceding provisions shall be carried forward to the succeeding accounting period and be treated for the purposes of section 75 as if it were expenses of management deductible for that period.
4
In this section—
a
a “Schedule A loss” means a loss incurred by a company in a Schedule A business carried on by it; and
b
F2“company with investment business” has the same meaning as in Part IV.
5
The preceding provisions of this section apply to a Schedule A business only to the extent that it is carried on—
a
on a commercial basis, or
b
in the exercise of statutory functions.
6
For the purposes of subsection (5)(a)—
a
a business or part is not carried on on a commercial basis unless it is carried on with a view to making a profit, but if it is carried on so as to afford a reasonable expectation of profit it is treated as carried on with a view to making a profit; and
b
if there is a change in the manner in which a business or part is carried on, it is treated as having been carried on throughout an accounting period in the way in which it was being carried on by the end of the period.
7
In subsection (5)(b) “statutory functions” means functions conferred by or under any enactment (including an enactment contained in a local or private Act).
See s.434A—limitations on loss relief for life assurance company.