Finance (No. 2) Act 2017

CTA 2009

133 (1) Section 1048 (treatment of deemed trading loss under section 1045) is amended as follows.

(2) In subsection (1) at the end insert “(“the deemed loss-making period”)”.

(3) In subsection (3)—

(a) before paragraph (a) insert—

“(za) the deemed loss-making period begins before 1 April 2017”,

(b) in paragraph (a) for “the accounting period” substitute “the deemed loss-making period”.

(4) After subsection (4) insert—

“(4A) Subsection (4B) applies if—

(a) the deemed loss-making period begins on or after 1 April 2017,

(b) the company—

(i) begins to carry on a trade in the deemed loss-making period which it continues to carry on in the following accounting period, or

(ii) begins to carry on a trade in an accounting period after the deemed-loss making period, and

(c) the trade is derived from the research and development in relation to which the relief mentioned in subsection (1) was obtained.

(4B) In that case, so far as—

(a) the company has not obtained relief in respect of the trading loss under any other provision, and

(b) the loss has not been surrendered under Part 5 of CTA 2010 (group relief) (surrender of relief to group or consortium members),

the trading loss is to be treated as if it were a loss of that trade brought forward under the relevant provision (see subsection (4C)) to the relevant period (see subsection (4D).

(4C) In subsection (4B) “the relevant provision” is—

(a) section 45A(4) of CTA 2010 if—

(i) the trade is not a ring fence trade within the meaning of Part 8 of CTA 2010 (see section 277 of that Act), and

(ii) relief under section 37 of CTA 2010 would not be unavailable by reason of section 44 of that Act for a loss (assuming there was one) made in the trade in the relevant period (see subsection (4D), and

(b) section 45B(2) of CTA 2010 if either of the conditions in paragraph (a) is not met.

(4D) In subsection (4B) and (4C) “the relevant period” means—

(a) in a case where the company began the trade in the deemed loss-making period and continued to carry on the trade in the following accounting period, that following accounting period, and

(b) in a case where the company began the trade in an accounting period after the deemed loss-making period, the accounting period in which the company began the trade.”

(5) In subsection (5) for “Subsection (4) is” substitute “Subsections (4) and (4B) are”.