Corporation Tax Act 2010

[F1 269ZD Restriction on deductions from total profits U.K.

(1) This section has effect for determining the taxable total profits of a company for an accounting period.

(2) The sum of any relevant deductions made by the company for the accounting period may not exceed the difference between—

(a) the relevant maximum, and

(b) the sum of—

(i) any deductions falling within section 269ZB(3) (carry forward of trade loss against subsequent trade profits) made by the company for the accounting period,

[F2 (ia) any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods),] F3 ...

(ii) any deductions made by the company for the accounting period under sections 457(3) and 463H(5) of CTA 2009 (carry forward of non-trading deficits from loan relationships against subsequent non-trading profits), F4 ... [F5 and

(iia) any deductions of non-BLAGAB allowable losses from the shareholders’ share of BLAGAB chargeable gains made for the accounting period under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act.]

F4 (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

But this is subject to subsection (7) F6 ....

(3) The following deductions made for an accounting period are “relevant deductions” for the purposes of this section—

(a) a deduction under section 463G of CTA 2009 (carry forward of non-trading deficit against total profits);

(b) a deduction under section 753 of CTA 2009 (non-trading losses on intangible fixed assets) in respect of a loss treated by subsection (3) of that section (carry forward of losses) as if it were a loss of the accounting period;

(c) a deduction under section 1219 of CTA 2009 (expenses of management of a company's investment business) in respect of an amount treated by section 1223(3) of that Act (carrying forward of expenses of management and other amounts) as expenses of management deductible for the accounting period;

(d) a deduction under section 1219 of CTA 2009 (expenses of management of a company's investment business) in respect of a loss treated by section 63(3) (carrying forward of certain losses made by company with investment business which ceases to carry on UK property business) as an expense of management deductible for the accounting period;

(e) a deduction under section 37 (relief for trade losses against total profits) made in reliance on section 1210(3), 1216DB(3), 1217DB(3), 1217MB(2), 1217SB(2) or 1218ZDB(2) of CTA 2009;

(f) a deduction under section 45A (carry forward of trade loss against total profits);

(g) a deduction under section 62(3) (relief for losses made in UK property business) in respect of a loss treated by subsection (5)(b) of that section (carry forward of losses) as a loss made by the company in the accounting period;

(h) a deduction under section 303C (excess carried forward non-decommissioning losses of ring fence trade: relief against total profits);

(i) a deduction under Part 5 (group relief) made in respect of a loss surrendered under that Part in reliance on section 1210(3), 1216DB(3), 1217DB(3), 1217MB(2), 1217SB(2) or 1218ZDB(2) of CTA 2009;

(j) a deduction under Part 5A (group relief for carried-forward losses);

(k) a deduction under section 124B of FA 2012 (deduction from total profits of excess carried-forward BLAGAB trade losses),

(but see section 269ZJ (insurance companies: shock losses).

(4) In this section the “relevant maximum” means the sum of—

(a) 50% of the company's relevant profits for the accounting period [F7 (see section 269ZFA)], and

(b) the amount of the company's deductions allowance for the accounting period.

F8 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F10 (7) Subsection (2) does not apply in relation to a company for an accounting period where the amount given by paragraph (1) of step 1 in section 269ZF(3) is not greater than nil.]]

Textual Amendments

F1 Pt. 7ZA 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. 16

F2 S. 269ZD(2)(b)(ia) inserted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 para. 4, 42 (with Sch. 4 paras. 43-46)

F3 Word in s. 269ZD(2)(b) omitted (with effect in relation to accounting periods beginning on or after 1.4.2020) by virtue of Finance Act 2020 (c. 14), Sch. 4 paras. 14(2)(a), 42 (with Sch. 4 paras. 43-46)

F4 S. 269ZD(2)(b)(iii) and word omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 6(2)(a)(ii)

F5 S. 269ZD(2)(b)(iia) and word inserted (with effect in relation to accounting periods beginning on or after 1.4.2020) by Finance Act 2020 (c. 14), Sch. 4 paras. 14(2)(b), 42 (with Sch. 4 paras. 43-46)

F6 Words in s. 269ZD(2) omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 6(2)(b)

F7 Words in s. 269ZD(4)(a) inserted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by Finance Act 2019 (c. 1), Sch. 10 para. 6(3)

F8 S. 269ZD(5) omitted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by virtue of Finance Act 2019 (c. 1), Sch. 10 para. 6(4)

F9 S. 269ZD(6) omitted (with effect in relation to accounting periods beginning on or after 1.4.2020) by virtue of Finance Act 2020 (c. 14), Sch. 4 paras. 27, 42 (with Sch. 4 paras. 43-46)

F10 S. 269ZD(7) substituted (with effect in accordance with Sch. 10 para. 32 of the amending Act) by Finance Act 2019 (c. 1), Sch. 10 para. 6(5)