Corporation Tax Act 2009

Election to carry back U.K.

198 Election to carry back U.K.

(1) This section applies if a post-cessation receipt is received by a company in an accounting period beginning not later than 6 years after the company permanently ceased to carry on the trade.

(2) The company may elect that the tax chargeable in respect of the receipt is to be charged as if the receipt had been received on the date of the cessation (but see sections 199 and 200).

(3) The election must be made before the end of the period of two years beginning immediately after the end of the accounting period in which the receipt is received.

199 Deductions already made are not displaced U.K.

(1) This section applies if—

(a) a company which has permanently ceased to carry on a trade makes an election under section 198 in respect of a post-cessation receipt (“the carried back receipt”), and

(b) a deduction in respect of a loss has already been made under section 196 for an accounting period later than that in which the cessation occurred.

(2) Nothing in section 196 (read with section 197(2)) requires or permits a deduction in respect of that loss to be allowed, as a result of the election, for the accounting period in which the cessation occurred instead of the accounting period for which the deduction has already been made.

(3) But if the deduction was made for the accounting period in which the carried back receipt was received, subsection (2) applies to the loss only so far as it has been deducted from post-cessation receipts other than the carried back receipt.

200 Election given effect in accounting period in which receipt is received U.K.

(1) If a company makes an election under section 198, the additional tax is payable for the accounting period in which the receipt is received (and not for the accounting period in which the cessation occurred).

(2) In subsection (1) “the additional tax” means an amount of tax equal to the difference between—

(a) the amount of tax that is chargeable on the company for the accounting period in which the cessation occurred (“amount A”), and

(b) the amount of tax that would have been chargeable on the company for that period if the election had not been made (“amount B”).

(3) If—

(a) the company has made, under section 198, one or more other elections for receipts to be treated as received in the period in which the cessation occurred, and

(b) effect has been given to those elections,

the effect of those elections is taken into account in determining amounts A and B.