[F1Treatment of ring-fenced scheme lossesU.K.
Textual Amendments
F1Pt. 21A inserted (with effect in accordance with Sch. 16 para. 5 of the amending Act) by Finance Act 2010 (c. 13), Sch. 16 para. 3
937GRing-fenced scheme loss: treatment in period in which madeU.K.
(1)This section applies for the purpose of determining the amount (if any) of a ring-fenced scheme loss that may be brought into account by a company in the accounting period in which it is made.
(2)If the amount of the company's profits pool for the scheme as at the beginning of the period is nil, the ring-fenced scheme loss may not be brought into account.
(3)If the amount of the company's profits pool for the scheme as at the beginning of the period is—
(a)greater than nil, and
(b)less than the total of the ring-fenced scheme losses made in the period in relation to the scheme by the company,
only the relevant proportion of the ring-fenced scheme loss may be brought into account.
(4) For this purpose “ the relevant proportion ” means—
where—
A is the amount of the company's profits pool as at the beginning of the period, and
B is the total of the ring-fenced scheme losses made in the period in relation to the scheme by the company.
(5)If the amount of the company's profits pool for the scheme as at the beginning of the period is equal to or greater than the total of the ring-fenced scheme losses made in the period in relation to the scheme by the company, the ring-fenced scheme loss may be brought into account in full.
(6)A reference in this paragraph to bringing a ring-fenced scheme loss into account is to bringing it into account in determining a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).
937HRing-fenced scheme loss: treatment in subsequent periodsU.K.
(1)This section applies where—
(a)a company makes one or more scheme profits in an accounting period in relation to a risk transfer scheme,
(b)disregarding any profits or losses made otherwise than as a result of the scheme, the relevant group makes a pre-tax economic profit in the period as a result of fluctuations in the scheme rate, index or value, and
(c)the amount of the company's losses pool for the scheme as at the beginning of the period is greater than nil.
(2)The company may bring into account, as if it were a loss made in the period from a loan relationship—
where—
A is so much of the amount of the company's losses pool as at the beginning of the period as does not exceed the total of the relevant scheme profits made in the period in relation to the scheme by the company, and
B is the proportion of the total of the relevant scheme profits made in the period in relation to the scheme by the company that consists of profits made from its loan relationships.
(3)The company may bring into account, as if it were a loss made in the period from a derivative contract—
where—
A has the same meaning as in subsection (2), and
C is the proportion of the total of the relevant scheme profits made in the period in relation to the scheme by the company that consists of profits made from its derivative contracts.
(4)A reference in this section to bringing an amount into account is to bringing it into account in determining a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).]