SCHEDULES
SCHEDULE 2Restrictions applying to certain deductions made by banking companies
PART 3Commencement and anti-forestalling provision
9Anti-forestalling provision
1
This sub-paragraph applies if—
a
for the purposes of corporation tax a banking company has profits (“pre-commencement profits”) for an accounting period ending before 1 April 2015,
b
in the absence of this paragraph the banking company would, for corporation tax purposes, be entitled to deduct from the pre-commencement profits for the accounting period an amount in respect of any relevant carried-forward losses,
c
the pre-commencement profits arise as a result of any arrangements entered into on or after 3 December 2014, and
d
the main purpose, or one of the main purposes, of the arrangements is to secure a corporation tax advantage as a result of the fact that Chapter 3 of Part 7A of CTA 2010 (inserted by this Schedule) is not to have effect for the accounting period for which the deduction would be made.
2
If sub-paragraph (1) applies, the banking company is not entitled to deduct from the pre-commencement profits any amount in respect of the relevant carried-forward losses.
3
Sub-paragraph (1) does not apply in relation to a banking company which falls within section 269B(5)(b) of CTA 2010 (inserted by this Schedule).
4
In this paragraph—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“corporation tax advantage” means—
- a
a relief from corporation tax or increased relief from corporation tax,
- b
a repayment of corporation tax or increased repayment of corporation tax,
- c
the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax,
- d
the avoidance of a possible assessment to corporation tax, or
- e
the deferral of a payment of corporation tax or advancement of a repayment of corporation tax.
- a
5
Terms used in this paragraph and in Chapter 3 of Part 7A of CTA 2010 have the same meaning in this paragraph as in that Chapter; and, so far as necessary for the purposes of this sub-paragraph, that Part is to be treated as having come into force on the same day as this paragraph.
6
This paragraph is treated as having come into force on 3 December 2014.
7
Sub-paragraph (8) applies where a company has an accounting period beginning before 1 April 2015 and ending on or after that date (“the straddling period”).
8
For the purposes of this paragraph—
a
so much of the straddling period as falls before 1 April 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and
b
the profits or losses of the company for the straddling period are apportioned to the two separate accounting periods—
i
in accordance with section 1172 of CTA 2010 (time basis), or
ii
if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.