PART 5A Group relief for carried-forward losses

CHAPTER 2 Surrender of company's carried-forward losses etc

188BI Restriction on surrender of losses made when non-UK resident
(1) This section applies in relation to a loss or other amount carried forward to the surrender period if during the loss-making period the surrendering company was a non-UK resident company—
(a) carrying on a trade of dealing in or developing UK land, or
(b) carrying on a trade in the United Kingdom through a permanent establishment.
(2) If the surrendering company was established in the EEA during the loss-making period, it may surrender the loss or other amount under this Chapter only so far as conditions A and B are met.
Subsection (8) imposes restrictions on a surrender under this subsection.
(3) In any other case, the surrendering company may surrender the loss or other amount under this Chapter only so far as conditions A, B and C are met in relation to the loss or amount.
(4) Condition A is that the loss or other amount is attributable to activities of the surrendering company in respect of which it is within the charge to corporation tax for the loss-making period.
(5) Condition B is that the loss or other amount is not attributable to activities of the surrendering company that are double taxation exempt for the loss-making period (within the meaning given by section 186).
(6) Condition C is that—
(a) the loss or other amount does not correspond to, and is not represented in, an amount with subsection (7), and
(b) no amount brought into account in calculating the loss or other amount corresponds to, or is represented in, an amount within subsection (7).
(7) An amount is within this subsection if, for the purposes of non-UK tax chargeable under the law of a territory, the amount is or at any time has been (in any period) deductible from or otherwise allowable against non-UK profits of any person.
(8) A loss or other amount may not be surrendered by virtue of subsection (2) if and to the extent that it, or any amount brought into account in calculating it, corresponds to, or is represented in, amounts within subsection (9).
(9) An amount is within this subsection if, for the purposes of non-UK tax chargeable under the law of a territory, the amount has (in any period) been deducted from or otherwise allowed against non-UK profits of any person.
(10) But an amount is not to be taken to be within subsection (7) or (9) by reason only that it is—
(a) an amount of profits brought into account for the purpose of being excluded from non-UK profits of the person, or
(b) an amount brought into account in calculating an amount of profits brought into account as mentioned in paragraph (a).
(11) Subsection (12) applies for the purposes of subsection (7) if, in order to determine if an amount is or at any time has been deductible or otherwise allowable for the purposes of non-UK tax chargeable under the law of a territory, it is necessary under that law to know if the amount (or a corresponding amount) is or at any time has been deductible or otherwise allowable for tax purposes in the United Kingdom.
(12) The amount is to be treated as deductible or otherwise allowable for the purposes of the non-UK tax chargeable under the law of the territory concerned.
(13) For the purposes of this section a company is established in the EEA if—
(a) it is constituted under the law of the United Kingdom or an EEA territory, and
(b) it has its registered office, central administration or principal place of business within the European Economic Area.
(14) In subsection (13) “EEA territory”, in relation to any time, means a territory outside the United Kingdom that is within the European Economic Area at that time.
Pt. 5A 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. 23