Finance (No. 2) Bill (HL Bill 156)

(2) If a company has a Northern Ireland loss and a mainstream loss in
the same accounting period, sections 37 and 45A to 45F have effect in
relation to each of those losses separately.

(3) If by reason of this section a company is entitled under section 37(2),
545A(5), 45B(5) or 45F(2) to make a claim in relation to a Northern
Ireland loss (or an amount of such a loss) and a claim in relation to a
mainstream loss (or an amount of such a loss), the company may
make—

(a) one of those claims only, or

(b) 10both of those claims in either order.

(4) Where—

(a) relief is given under section 37, 45A, 45B or 45F for a
Northern Ireland loss (or an amount of such a loss), and

(b) the profits against which the relief is given includes some
15profits of the trade that are Northern Ireland profits and some
that are not,

the relief is given first, so far as possible, against the Northern Ireland
profits.

(5) Where—

(a) 20relief is given under section 37, 45, 45A, 45B or 45F for a loss
(or an amount of a loss) that is not a Northern Ireland loss,
and

(b) the profits against which the relief is given include some
profits of the trade that are Northern Ireland profits and some
25that are not,

the relief is given first, so far as possible, against the profits that are
not Northern Ireland profits.

357JC Restriction on deductions

(1) Subsection (2) applies where—

(a) 30relief is given under section 37 for a Northern Ireland loss
(“the loss”),

(b) the profits against which the relief is given include profits
that are not Northern Ireland profits, and

(c) at any time during the accounting period for which the relief
35is given (“the profit period”) the Northern Ireland rate is
lower than the main rate.

(2) The reference in section 37(4) to “the amount of the loss” is to the
restricted deduction for the loss, as determined under section 357JJ
(restricted deduction where Northern Ireland rate lower than main
40rate).

(3) Subsection (4) applies where—

(a) relief is given under section 45A, 45B or 45F for an amount of
a Northern Ireland loss (“the loss”),

(b) the profits against which the relief is given include profits
45that are not Northern Ireland profits, and

(c) at any time during the accounting period for which the relief
is given (“the profit period”), the Northern Ireland rate is
lower than the main rate.

(4) The reference in section 45A(6), 45B(4) or (as the case may be) 45F(5)
to “the unrelieved amount” is to so much of that amount as is equal
to the restricted deduction for the loss, as determined under section
357JJ.””

80 5After section 357JH insert—

““Loss relief in relation to Northern Ireland profits and losses: Part 5A

357JHA Availability of relief

(1) The reference in section 188BB(1)(a) (group relief for carried-forward
losses: surrendering of carried-forward losses and other amounts) to
10a loss carried forward to an accounting period of a company under
section 45A(4) is, where a company has Northern Ireland losses or
mainstream losses carried forward to an accounting period under
that section, a reference to those Northern Ireland losses or
mainstream losses.

(2) 15Where—

(a) a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is a Northern Ireland loss, and

(b) the profits against which the relief is claimed include some
20profits that are Northern Ireland profits and some that are
not,

the relief in relation to that surrenderable amount is given first, so far
as possible, against the Northern Ireland profits.

(3) Where—

(a) 25a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is not a Northern Ireland loss, and

(b) the profits against which the relief is claimed include some
profits that are Northern Ireland profits and some that are
30not,

the relief in relation to that surrenderable amount is given first, so far
as possible, against the profits that are not Northern Ireland profits.

357JHB Restriction on deductions

(1) Subsection (2) applies where—

(a) 35a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is a Northern Ireland loss (“the loss”),

(b) the profits against which the relief is claimed include profits
that are not Northern Ireland profits, and

(c) 40at any time during the accounting period for which the relief
is claimed (“the profit period”), the Northern Ireland rate is
lower than the main rate.

(2) In section 188CK(2) and (4) (amount of deduction)—

(a) the reference in paragraph (a) to “an amount equal to” the
45surrendering company’s surrenderable amounts is, so far as
those surrenderable amounts comprise the loss, to the
restricted deduction for the loss, as determined under section

357JJ (restricted deduction where Northern Ireland rate
lower than main rate);

(b) the reference in paragraph (b) to “an amount equal to” part of
the surrendering company’s surrenderable amounts is, so far
5as that part comprises the loss, to the restricted deduction for
the loss, as determined under section 357JJ.

357JHC Modifications of Chapter 4 of Part 5A

(1) Chapter 4 of Part 5A (limitations on group relief for carried-forward
losses: claims under section 188CB) has effect, in relation to a claim
10under section 188CB in relation to surrenderable amounts that
include a Northern Ireland loss, subject to the following provisions
of this section.

(2) In section 188DB(1) (limitation on amount of group relief for carried-
forward losses applying to all claims under section 188CB)—

(a) 15paragraphs (a) and (b) are treated as imposing separate
limits;

(b) the limit in paragraph (a) on the amount of group relief for
carried-forward losses to be given on a claim under section
188CB has effect as a limit on the amount of losses and other
20surrenderable amounts in relation to which relief is to be
given on the claim;

(c) the limit in paragraph (b) on the amount of group relief for
carried-forward losses to be given on a claim under section
188CB has effect as a limit on the amount of the deduction to
25be made as a result of the claim.

(3) In section 188DC(6)(b) (unused part of the surrenderable amounts),
and in section 188DF(2) so far as it applies in relation to section
188DC, references to the amount of group relief for carried-forward
losses given on a claim are to the amount of losses and other
30surrenderable amounts in relation to which relief is given on the
claim.

(4) In section 188DE(4)(b) (previously claimed group relief for carried-
forward losses), and in section 188DF(2) so far as it applies in relation
to section 188DE, references to the amount of group relief for carried-
35forward losses given on a claim are to the amount of the deduction
made as a result of the claim.

(5) In section 188DH (limitation on group relief for carried-forward
losses where claim under section 188CB is based on consortium
condition 1), the limit in subsection (2) on the amount of group relief
40for carried-forward losses to be given on a claim has effect as a limit
on the amount of the deduction to be made as a result of the claim.

(6) In section 188DL (limitation on group relief for carried-forward
losses where claim under section 188CB is made by member of a
group of companies)—

(a) 45the reference in subsection (3)(a) to the maximum amount of
group relief for carried-forward losses that could be claimed
by the claimant company has effect as a reference to the
maximum amount of the deduction that could be made as a
result of claims by the claimant company, and

(b) the reference in subsection (3)(b) to the maximum amount of
group relief under Part 5 that could be claimed by the
claimant company has effect as a reference to the maximum
amount of the deduction that could be made as a result of
5claims by the claimant company.

357JHD Modifications of Chapter 5 of Part 5A

(1) Chapter 5 of Part 5A (limitations on group relief for carried-forward
losses: claims under section 188CC) has effect, in relation to a claim
under section 188CC in relation to surrenderable amounts that
10include a Northern Ireland loss, subject to the following provisions
of this section.

(2) In section 188EB(1) (limitation on amount of group relief for carried-
forward losses applying to all claims under section 188CC)—

(a) paragraphs (a), (b) and (c) are treated as imposing separate
15limits;

(b) the limit in paragraph (a) on the amount of group relief for
carried-forward losses to be given on a claim under section
188CC has effect as a limit on the amount of losses and other
surrenderable amounts in relation to which relief is to be
20given on the claim;

(c) the limits in paragraphs (b) and (c) on the amount of group
relief for carried-forward losses to be given on a claim under
section 188CC have effect as limits on the amount of the
deduction to be made as a result of the claim.

(3) 25In section 188EC(6) and (8)(b) (unused part of the surrenderable
amounts attributable to the specified-loss making period), and in
section 188EG(2) so far as it applies in relation to section 188EC,
references to the amount of group relief for carried-forward losses
given on a claim are to the amount of losses and other surrenderable
30amounts in relation to which relief is given on the claim.

(4) In section 188EE(4)(b) (previously claimed group relief for carried-
forward losses), and in section 188EG(2) so far as it applies in relation
to section 188EE, references to the amount of group relief for carried-
forward losses given on a claim are to the amount of the deduction
35made as a result of the claim.

(5) In section 188EI (condition 4: companies in link company’s group),
the limit in subsections (2) and (3) on the amount of group relief for
carried-forward losses to be given on a claim has effect as a limit on
the amount of the deduction to be made as a result on the claim.

(6) 40In section 188EK (conditions 3 or 4: surrendering company in group
of companies), the reference in subsection (4) to the maximum
amount of group relief for carried-forward losses that could be given
has effect as a reference to the maximum amount of losses and other
surrenderable amounts in relation to which relief could be given.””

81 45In section 357JJ (restricted deduction: Northern Ireland rate lower than main
rate)—

(a) in subsection (1) for “357JC(2), 357JE(2) or 357JG(2)” substitute
“357JC(2) or (4), 357JG(2) or 357JHB(2)”, and

(b) in subsection (6) for “section 357JC(1), 357JE(1) or 357JG(1)”
substitute “357JC(1) or (3), 357JG(1) or 357JHB(1)”.

82 In section 357RF (losses of film trade: restriction on use of losses while film
is in production) in subsection (2) for “subsection (2)” substitute
5“subsections (2) and (3)”.

83 In section 357RG (losses of film trade: use of losses in later periods) in
subsection (3) after “subsections (5)” insert “, (5A)”.

84 In section 357SF (losses of television programme trade: restriction on use of
losses while programme in production) in subsection (2) for “subsection (2)”
10substitute “subsections (2) and (3)”.

85 In section 357SG (losses of television programme trade: use of losses in later
periods) in subsection (3) after “subsections (5)” insert “, (5A)”.

86 In section 357TF (losses of video game trade: restriction on use of losses
while video game in development) in subsection (2) for “subsection (2)”
15substitute “subsections (2) and (3)”.

87 In section 357TG (losses of video game trade: use of losses in later periods)
in subsection (3) after “subsections (5)” insert “, (5A)”.

88 In section 357UF (losses of theatrical trade: restriction on use of losses before
completion period) in subsection (2) for “subsection (2)” substitute
20“subsections (2) and (3)”.

89 In section 357UO (losses of orchestral trade: restriction on use of losses
before completion period) in subsection (2) for “subsection (2)” substitute
“subsections (2) and (3)”.

Part 10 25Minor and consequential amendments

ICTA 1988

90 (1) Section 826 (interest on tax overpaid) is amended as follows.

(2) After subsection (7A) insert—

“(7AA) In any case where—

(a) 30a company ceases to carry on a trade in an accounting period
(“the terminal period”),

(b) as a result of a claim under section 45F of CTA 2010, the
whole or any part of a loss made in the trade is relieved for
the purposes of corporation tax against profits (of whatever
35description) of an earlier accounting period (“the earlier
period”) which does not fall wholly within the period of 12
months immediately preceding the terminal period, and

(c) a repayment falls to be made of corporation tax paid for the
earlier period or of income tax in respect of a payment
40received by the company in that accounting period,

then, in determining the amount of interest (if any) payable under
this section on the repayment referred to in paragraph (c) above, no
account shall be taken of so much of the amount of that repayment
as falls to be made as a result of the claim under section 45F, except

so far as concerns interest for any time after the date on which any
corporation tax for the terminal period became (or, as the case may
be, would have become) due and payable, as mentioned in
subsection (7D) below).””

(3) 5In subsection (7D) (meaning of references to the date on which corporation
tax became payable) after “(7A),” insert “(7AA),”.

(4) In subsection (7E) (power conferred by section 59E of TMA 1970 not to
include power to change the meaning of references to the date on which
corporation tax became payable) after “(7A),” insert “(7AA)”.

10FA 1998

91 Schedule 18 to FA 1998 (company tax returns, assessments and related
matters) is amended in accordance with paragraphs 92 to 106.

92 In paragraph 61(1)(c) (consequential claims etc arising out of certain
Revenue amendments or assessments), in the words in brackets, after
15“relief” insert “or group relief for carried-forward losses”.

93 In the heading of Part 8 (claims for group relief) at the end insert “and group
relief for carried-forward losses”.

94 For paragraph 66 (introduction to Part 8) substitute—

“66 (1) This Part of this Schedule applies to—

(a) 20claims for group relief under Part 5 of the Corporation Tax
Act 2010, and

(b) claims for group relief for carried-forward losses under
Part 5A of that Act.

(2) In this Part of this Schedule (except where otherwise indicated)—

(a) 25references to “relief” are to either of those forms of relief,
and

(b) references to “a claim” are to a claim for either of those
forms of relief.””

95 In paragraph 67 (claim to be included in company tax return) omit “for
30group relief”.

96 (1) Paragraph 68 (content of claims) is amended as follows.

(2) In sub-paragraph (1), in the words before paragraph (a), omit “for group
relief”.

(3) After sub-paragraph (4) insert—

“(5) 35A claim for group relief for carried-forward losses made under
section 188CB of the Corporation Tax Act 2010 must also state
whether or not there is a company mentioned in sub-paragraph (6)
that was not resident in the United Kingdom in either or both of
the following periods—

(a) 40the accounting period of the surrendering company to
which the claim relates,

(b) the corresponding accounting period of the claimant
company.

(6) Those companies are the claimant company, the surrendering
company and any other company by reference to which—

(a) the claimant company and the surrendering company are
members of the same group,

(b) 5consortium condition 1 in section 188CF or consortium
condition 2 in section 188CG of the Corporation Tax Act
2010 is satisfied in the case of the claimant company and
the surrendering company.

(7) A claim for group relief for carried forward-losses made under
10section 188CC of the Corporation Tax Act 2010 must also state
whether or not there is a company mentioned in sub-paragraph (8)
that was not resident in the United Kingdom in any or all of the
following periods—

(a) the specified loss-making period of the surrendering
15company,

(b) the accounting period of the surrendering company to
which the surrender relates,

(c) the accounting period of the claimant company that
corresponds with the period mentioned in paragraph (b).

(8) 20Those companies are the claimant company, the surrendering
company and any other company by reference to which
consortium condition 3 in section 188CH or consortium condition
4 in section 188CI is satisfied in the case of the claimant company
and the surrendering company.””

97 (1) 25Paragraph 69 (claims for more or less than the amount available for
surrender) is amended as follows.

(2) In subsection (1) omit “for group relief”.

(3) In subsection (3), in the first step, after “Part 5” insert “or (as the case may be)
Part 5A”.

98 (1) 30Paragraph 70 (consent to surrender) is amended as follows.

(2) For sub-paragraph (1) substitute—

“(1) In accordance with Requirement 1 in section 130(2), 135(2),
188CB(3) or (as the case may be) 188CC(3) of the Corporation Tax
Act 2010, a claim requires the consent of the surrendering
35company.””

(3) In sub-paragraph (4) omit “for group relief”.

(4) In sub-paragraph (6)—

(a) after “means” insert “—

(a) ”,”

(b) 40at the end insert— “,

“(b) a claim for group relief for carried-forward losses
under section 188CB of that Act based on
consortium condition 1 or 2 (see Requirement 3 in
that section), and

(c) 45a claim for group relief for carried-forward losses
under section 188CC of that Act based on

consortium condition 3 or 4 (see Requirement 3 in
that section).”

99 In Paragraph 71 (notice of consent) after sub-paragraph (1) insert—

“(1A) Notice of consent given in respect of a claim for carried-forward
5losses made under section 188CC of the Corporation Tax Act 2010
must also state which accounting period of the surrendering
company is the specified loss-making period.”

100 After paragraph 71 insert—

““Notice of consent: additional requirements where claim is for group relief for carried-
10forward losses

71A (1) Where notice of consent by the surrendering company is given in
respect of a claim for carried-forward losses, the notice must
comply with the additional requirements in this paragraph.

Otherwise the notice is ineffective.

(2) 15The notice must identify the particular losses and other amounts
carried forward to the surrender period that are to be treated as
surrendered in satisfaction of the claim.

(3) The notice must identify a loss or other amount by specifying—

(a) the provision of the Corporation Tax Act 2009 or the
20Corporation Tax Act 2010 under which it was carried
forward to the surrender period, and

(b) in a case where the surrendering company is owned by a
consortium, the accounting period of the surrendering
company to which the loss or other amount is attributable.

(4) 25Section 153 of the Corporation Tax Act 2010 (companies owned by
consortiums) applies for the purposes of this paragraph.””

101 (1) Paragraph 72 (notice of consent requiring amendment of return) is amended
as follows.

(2) For sub-paragraph (1) substitute—

“(1) 30Where notice of consent by the surrendering company relates to a
loss or other amount in respect of which corporation tax relief has
been given to the company for any accounting period, the
company must at the same time amend its company tax return for
that accounting period so as to reflect the notice of consent.””

(3) 35Omit sub-paragraph (2).

(4) In sub-paragraph (3) omit “or (2)”.

(5) In sub-paragraph (4) omit “or (2)”.

102 (1) Paragraph 73 (withdrawal or amendment of claim) is amended as follows.

(2) In sub-paragraph (1) omit “for group relief”.

(3) 40In sub-paragraph (2) omit “for group relief”.

103 (1) Paragraph 74 (time limit for claims) is amended as follows.

(2) In sub-paragraph (1), in the words before paragraph (a), omit “for group
relief”.

(3) In sub-paragraph (2) omit “for group relief”.

(4) In sub-paragraph (3) omit “for group relief”.

(5) 5In sub-paragraph (4) omit “for group relief” in both places those words
occur.

104 (1) Paragraph 75A (assessment on other claimant companies) is amended as
follows.

(2) In sub-paragraph (2) omit “group”.

(3) 10In sub-paragraph (6) omit “for group relief”.

105 (1) Paragraph 76 (assessment to recover excessive relief) is amended as follows.

(2) In the italic heading omit “group”.

(3) In sub-paragraph (1) omit “group”.

106 (1) Paragraph 77 (joint amended returns) is amended as follows.

(2) 15In sub-paragraph (1)—

(a) in paragraph (a) omit “for group relief”, and

(b) in paragraph (b) omit “group” in the second and third places that
word occurs.

(3) In sub-paragraph (3), in paragraph (a), omit “for group relief”.

20CAA 2001

107 CAA 2001 is amended as follows.

108 (1) Section 212Q (restrictions on capital allowance buying when there are
postponed allowances) is amended as follows.

(2) In subsection (4) after “37,” insert “45A,”.

(3) 25In subsection (6)—

(a) after “may not be set off” insert “by a company (“the claimant
company”)”,

(b) after “CTA 2010” insert “or group relief for carried forward losses in
accordance with Part 5A of CTA 2010”, and

(c) 30omit “by a company (“the claimant company”)”.

109 In section 138 (deferment of balancing charge arising when there is a
disposal event in respect of a ship: limit on amount of deferral) in subsection
(2)(b) after “45” insert “, 45A or 45B”.

110 In Schedule A1 (first-year tax credits) in paragraph 20 (list of provisions to
35which restriction on carrying forward losses applies) in paragraph (a) for
“section 45” substitute “sections 45, 45A and 45B”.

EA 2004

111 In section 27 of EA 2004 (tax exemption for NDA activities) in subsection

(1)(b) for the words from “relieved” to the end substitute “—

(i) relieved under section 37, 45, 45A, 45B or 45F of the
Corporation Tax Act 2010 (relief for trading losses),

(ii) surrendered under Part 5 of that Act (group relief), or

(iii) 5surrendered under Part 5A of that Act (group relief
for carried-forward losses).””

CTA 2009

112 CTA 2009 is amended as follows.

113 In section 39(3) (losses of mines, quarries and other concerns)—

(a) 10omit “and”, and

(b) after “(group relief)” insert “and Part 5A of that Act (group relief for
carried forward losses)”.

114 (1) Section 364 (group relief claims involving impaired or released consortium
debts) is amended as follows.

(2) 15In subsection (4) at the end insert “, and

• “group relief” means—

  (a)

  group relief under Part 5 of CTA 2010 (see section
  97(2) of that Act), and

  (b)

  group relief for carried-forward losses under Part 5A
  20of CTA 2010 (see section 188AA(4) of that Act).””

(3) In subsection (5) for “or 144” substitute “, 144 or 188DH”.

115 In section 371 (group relief claims involving impaired or released
consortium debts: interpretation) for the definition of “group relief”
substitute—

• 25““group relief” has the meaning given by section 364(4),”.”

116 In section 387 (treatment of deficit on basic life assurance and general
annuity business: introduction) in subsection (1) for “Chapter 16” substitute
“Chapters 16 and 16A”.

117 (1) Section 1048 (treatment of deemed trading loss under section 1045) is
30amended 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
352017”,”

(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) 40the deemed loss-making period begins on or after 1 April
2017,

(b) the company—