Corporation Tax Act 2010

[F1 Restriction on obtaining certain deductions U.K.

Textual Amendments

F1 Ss. 356NH-356NJ and cross-heading inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 59

356NH Restriction on deductions from contractor's ring fence profits U.K.

(1) For the purpose of determining the contractor's taxable total profits for an accounting period, the sum of any relevant deductions from total profits made by the contractor for the accounting period may not exceed the relevant Part 8ZA maximum.

(2) In this section “relevant deduction from total profits” means—

(a) any deduction of a loss (or an amount of a loss) under section 45(4)(b) (carry forward of pre-1 April 2017 loss against subsequent profits), so far as the loss arises from oil contractor activities,

(b) any deduction of a loss (or an amount of a loss) under section 45A (carry forward of post-1 April 2017 trade loss against total profits), so far as the amount is set against the contractor's ring fence profits, and

(c) any deduction of a loss or other amount under Part 5A (group relief for carried-forward losses), so far as the amount in question is set against the contractor's ring fence profits.

(3) In this section “the relevant Part 8ZA maximum” means the sum of—

(a) 50% of the contractor's ring fence profits for the accounting period, and

(b) the amount of the contractor's ring fence profits deductions allowance for the period.

356NI Deductions allowances where company has contractor's ring fence profits U.K.

(1) This section applies if a company (“C”) has contractor's ring fence profits for an accounting period.

(2) Subsections (3) to (6) set out how to determine, for the accounting period—

(a) C's deductions allowance for the purposes of Part 7ZA (restrictions on obtaining certain deductions), and

(b) C's contractor's ring fence profits deductions allowance.

(3) Determine in accordance with Part 7ZA what C's deductions allowance for the period would be in the absence of this section (and call this “amount A”).

(4) Determine C's contractor's ring fence profits deductions allowance for the period in accordance with subsection (5).

(5) C's “contractor's ring fence profits deductions allowance” for an accounting period—

(a) is so much of amount A as is specified in C's company tax return as its contractor's ring fence profits deductions allowance for the period, and

(b) accordingly, is nil if no amount is so specified.

(6) Subsection (7) applies if a relevant reversal credit is brought into account in calculating C's contractor's ring fence profits for the accounting period.

In this subsection the reference to bringing into account a relevant reversal credit is to be interpreted in accordance with section 269ZY.

(7) C's contractor's ring fence profits deductions allowance for the accounting period (as determined in accordance with subsection (5)) is to be treated for all purposes as increased by—

(a) the amount of the relevant reversal credit, or

(b) if lower, the amount of the contractor's ring fence profits for the accounting period.

(8) C's deductions allowance for the period for the purposes of Part 7ZA is to be taken to be an amount equal to amount A less the amount of C's ring fence profits deductions allowance for the period.

356NJ Modification of provisions restricting the use of losses U.K.

(1) The following deductions are to be treated as not being relevant deductions for the purposes of section 269ZD (restrictions on deductions from total profits)—

(a) the deduction of a loss (or an amount of a loss) under section 45A (carry forward of post- 1 April 2017 trade loss against total profits), so far as the amount is set against the company's contractor's ring fence profits for the accounting period;

(b) the deduction under Part 5A (group relief for carried-forward losses) of a loss or other amount, so far as the amount is set against the company's contractor's ring fence profits for the accounting period.

(2) A deduction under section 45(4)(b) (carry forward of pre-1 April 2017 trade loss against subsequent profits) of a loss arising from oil contractor activities is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).]