Finance Bill (HC Bill 102)

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(a) to be set off against any profits of the company (of whatever
description) for the deficit period, or

(b) to be carried back to be set off against profits for earlier
accounting periods.

(2) 5No claim may be made under subsection (1) in respect of so much of
the deficit as is surrendered as group relief under Part 5 of CTA 2010.

(3) For time limits and other provisions applicable to claims under
subsection (1), see section 463C.

(4) For what happens when a claim is made under subsection (1)(a), see
10section 463D.

(5) For what happens when a claim is made under subsection (1)(b), and
the profits available for relief when such a claim is made, see sections
463E and 463F.

463C Time limits for claims under section 463B(1)

(1) 15A claim under section 463B(1) must be made within—

(a) the period of 2 years after the deficit period ends, or

(b) such further period as an officer of Revenue and Customs
allows.

(2) Different claims may be made in respect of different parts of a non-
20trading deficit for any deficit period.

(3) But no claim may be made in respect of any part of a deficit to which
another such claim relates.

463D Claim to set off deficit against profits for the deficit period

(1) This section applies if a claim is made under section 463B(1)(a) for the
25whole or part of the deficit to be set off against profits for the deficit
period.

(2) The amount of the deficit to which the claim relates must be set off
against the profits of the company for the deficit period which are
identified in the claim.

(3) 30Those profits are reduced accordingly.

(4) Relief under this section must be given before relief is given against
profits for the deficit period—

(a) under section 37 or 62(1) to (3) of CTA 2010 (deduction of
losses from total profits for the same or earlier accounting
35periods), or

(b) as a result of a claim under section 463B(1)(b) (carry-back) in
respect of a deficit for a later period.

(5) No relief may be given under this section against ring fence profits of
the company within the meaning of Part 8 of CTA 2010 (oil activities)
40or contractor’s ring fence profits of the company within the meaning
of Part 8ZA of that Act (oil contractors).

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463E Claim to carry back deficit to earlier periods

(1) This section applies if a claim is made under section 463B(1)(b) for
the whole or part of the deficit to be carried back to be set off against
profits for accounting periods before the deficit period.

(2) 5The claim has effect only if it relates to an amount no greater than the
lesser of—

(a) so much of the deficit as is not an amount in relation to which
a claim is made under section 463B(1)(a), and

(b) the total amount of the profits available for relief under this
10section.

(3) Section 463F explains which profits are so available.

(4) The amount to which the claim relates is set off against those profits
by treating them as reduced accordingly.

(5) If those profits are profits for more than one accounting period, the
15relief is applied by setting off the amount to which the claim relates
against profits for a later period before setting off any remainder of
that amount against profits for an earlier period.

463F Profits available for relief under section 463E

(1) The profits available for relief under section 463E are the amounts
20which (apart from the relief) would be charged under this Part as
profits for accounting periods ending within the permitted period
after giving every prior relief.

(2) In this section—

  • “the permitted period” means the period of 12 months
    25immediately before the deficit period, and

  • “prior relief” means a relief which subsection (5) provides must
    be given before relief under section 463E.

(3) If an accounting period ending within the permitted period begins
before it, only a part of the amount which (apart from the relief)
30would be chargeable under this Part for the period, after giving
every prior relief, is available for relief under section 463E.

(4) That part is so much as is proportionate to the part of the accounting
period in the permitted period.

(5) The reliefs which must be given before relief under section 463E
35are—

(a) relief as a result of a claim under section 459(1)(a) or section
463B(1)(a) (claim for deficit to be set off against total profits
for the deficit period),

(b) relief in respect of a loss or deficit incurred or treated as
40incurred in an accounting period before the deficit period,

(c) relief under Part 6 of CTA 2010 (charitable donations relief in
respect of payments made wholly and exclusively for the
purposes of a trade),

(d) relief under section 37 of CTA 2010 (losses deducted from
45total profits of the same or an earlier accounting period), and

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(e) if the company is a company with investment business for the
purposes of Part 16 (companies with investment business)—

(i) any deduction in respect of management expenses
under section 1219 (expenses of management of a
5company’s investment business),

(ii) relief under Part 6 of CTA 2010 in respect of payments
made wholly and exclusively for the purposes of its
business, and

(iii) any allowance under Part 2 of CAA 2001 (plant and
10machinery allowances).

463G Carry forward of unrelieved deficit against total profits

(1) This section applies if conditions A to D are met.

(2) Condition A is that—

(a) any amount of the deficit (“the unrelieved amount”) is not—

(i) 15set off against profits on a claim under section
463B(1), or

(ii) surrendered as group relief under Part 5 of CTA 2010.

(3) Condition B is that it is not the case—

(a) that the company ceased to be a company with investment
20business in the deficit period, or

(b) (if the company was a company with investment business
immediately before the beginning of the deficit period) that
its investment business became small or negligible in the
deficit period.

(4) 25Condition C is that (if the company is a Solvency 2 insurance
company) it is not the case that the whole of the deficit is a shock loss.

(5) Condition D is that (if the company is a general insurance company)
the first accounting period after the deficit period is not an excluded
accounting period.

(6) 30The unrelieved amount is carried forward to the first accounting
period after the deficit period.

(7) The company may make a claim for the whole or part of the
unrelieved amount to be set off against the company’s total profits
for the first accounting period after the deficit period.

(8) 35If a claim is made under subsection (7)

(a) the unrelieved amount, or the part of it to which the claim
relates, must be set off against the company’s total profits for
the first accounting period after the deficit period, and

(b) those profits are reduced accordingly.

(9) 40No claim may be made under subsection (7) in respect of so much of
the unrelieved amount as is surrendered under Part 5A of CTA 2010
(group relief for carried-forward losses).

(10) A claim under subsection (7) must be made within—

(a) the period of two years after the end of the first accounting
45period after the deficit period, or

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(b) such further period as an officer of Revenue and Customs
allows.

(11) No relief may be given under this section against ring fence profits of
the company within the meaning of Part 8 of CTA 2010 (oil activities)
5or contractor’s ring fence profits of the company within the meaning
of Part 8ZA of that Act (oil contractors).

(12) If —

(a) the company is a Solvency 2 insurance company, and

(b) the deficit is partly (but not wholly) a shock loss,

10subsections (6) to (9) have effect as if references to the unrelieved
amount were to the eligible amount (see subsection (13)).

(13) In this section “the eligible amount” means so much of the unrelieved
amount as is not a shock loss; and for the purpose of determining
how much of the unrelieved amount is, or is not, a shock loss, it is to
15be assumed that in setting off or surrendering amounts as mentioned
in subsection (2)(a)(i) and (ii) the company uses shock losses before
other amounts.

(14) In this Chapter—

  • “company with investment business” has the same meaning as
    20in Part 16 (see section 1218B);

  • “excluded accounting period” has the meaning given by section
    269ZG of CTA 2010;

  • “general insurance company” is to be interpreted in accordance
    with section 269ZG of CTA 2010;

  • 25“shock loss” has the meaning given by section 269ZK of CTA
    2010;

  • “Solvency 2 insurance company” means an insurance company
    as defined in section 269ZP(2) of CTA 2010.

(15) In this Chapter references to a company’s investment business are to
30be construed in accordance with section 1219(2).

463H Carry forward of unrelieved deficit against non-trading profits

(1) Subsections (4) to (8) apply if—

(a) section 463G would apply but for the fact that the company’s
investment business became small or negligible in the
35accounting period mentioned in subsection (3)(b) of that
section,

(b) section 463G would apply but for condition D in that section
(no carry-forward to an excluded accounting period of a
general insurance company), or

(c) 40the company is a Solvency 2 insurance company and any
amount of the deficit would be eligible to be carried forward
under section 463G(6) were that amount not a shock loss (see
section 463G(4), (12) and (13)).

(2) Subsections (4) to (8) also apply if—

(a) 45subsections (6) to (10) of section 463G would apply but for the
fact that the company’s investment business became small or
negligible in the accounting period mentioned in section
463I(1)(c)(ii), or

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(b) subsections (6) to (10) of section 463G would apply but for
section 463I(1)(d) (no carry-forward under those subsections
to an excluded accounting period of a general insurance
company).

(3) 5In this section the “unrelieved amount”—

(a) in a case within paragraph (a) or (b) of subsection (1), is to be
interpreted in accordance with section 463G(2);

(b) in a case within paragraph (c) of subsection (1), means the
amount mentioned in that paragraph;

(c) 10in a case within subsection (2), means so much of the deficit
mentioned in section 463I(1)(a) as is not set off as mentioned
in section 463I(1)(b)(i) or surrendered as mentioned in section
463I(1)(b)(ii).

(4) The unrelieved amount is carried forward to the first accounting
15period (“period 2”) after—

(a) (in a case within subsection (1)) the deficit period, or

(b) (in a case within subsection (2)) the period mentioned in
section 463I(1)(a).

(5) So much of the unrelieved amount as is not the subject of a claim
20under subsection (7) must be set off against the non-trading profits
of the company for period 2.

(6) Those profits are reduced accordingly.

(7) The company may make a claim for relief under subsection (5) not to
be given in period 2 for the unrelieved amount or so much of it as is
25specified in the claim.

(8) A claim under subsection (7) is effective if, and only if, it is made—

(a) within the period of two years after the end of period 2, or

(b) within such further period as an officer of Revenue and
Customs may allow.

(9) 30Subsection (10) applies if any amount is carried forward under
subsection (4) to an accounting period (“the carry forward period”)
and—

(a) cannot be set off under subsection (5) against non-trading
profits of that period, or

(b) 35is the subject of a claim under subsection (7).

(10) If the company continues to be a company with investment business
throughout the carry forward period, subsections (4) to (8) have
effect as if—

(a) references to the unrelieved amount were to the amount
40mentioned in subsection (9), and

(b) references to—

(i) the deficit period, or

(ii) the period mentioned in section 463I(1)(a),

were to the carry forward period.

(11) 45In this section “non-trading profits”, in relation to a company, means
so much of the company’s profits as does not consist of trading

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income for the purposes of section 37 of CTA 2010 (deduction of
trading losses from total profits of the same or an earlier period).

463I Re-application of section 463G if any deficit remains after previous
application

(1) 5This section applies if—

(a) any amount of the deficit is carried forward to an accounting
period (“the later period”) of the company under section
463G(6),

(b) any of that amount is not—

(i) 10set off against the company’s total profits for the later
period on a claim under section 463G(7), or

(ii) surrendered as group relief for carried-forward losses
under Part 5A of CTA 2010,

(c) it is not the case—

(i) 15that the company ceased to be a company with
investment business in the later period, or

(ii) (if the company was a company with investment
business immediately before the beginning of the
later period) that its investment business became
20small or negligible in the later period, and

(d) it is not the case that the first accounting period after the later
period is an excluded accounting period of a general
insurance company.

(2) Subsections (6) to (10) of section 463G apply as if—

(a) 25references to the unrelieved amount were to so much of the
amount of the deficit carried forward to the later period as is
not set off or surrendered as mentioned in subsection (1)(b),
and

(b) references to the deficit period were to the later period.”

30Non-trading losses on intangible fixed assets

5 (1) Section 753 of CTA 2009 (treatment of non-trading loss) is amended as
follows.

(2) In subsection (3) (carry forward of non-trading loss)—

(a) in the words before paragraph (a), after “not” insert “, in any period
35(“the reference period”)”;

(b) in the words after paragraph (b) for “debit of” substitute “loss on
intangible fixed assets for”.

(3) After subsection (3) insert—

(4) But subsection (3) does not apply if the company ceased to be a
40company with investment business in the reference period.

(5) In the application of subsection (3) to an amount of a loss previously
carried forward under that subsection, the reference in paragraph (b)
to group relief under Part 5 of CTA 2010 is to be read as a reference
to group relief for carried-forward losses under Part 5A of that Act.

(6) 45In this section “company with investment business” has the same
meaning as in Part 16 (see section 1218B).”

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Expenses of management of investment business etc

6 (1) Section 1223 of CTA 2009 (carrying forward expenses of management and
other amounts) is amended as follows.

(2) In subsection (1)(b)—

(a) 5for “amounts” substitute “an amount”, and

(b) after “(2)(c),” insert

(i) a claim relating to the whole of the amount
has not been made under subsection (3B), or”.

(3) After subsection (3) insert—

(3A) 10But subsection (3) does not apply in relation to so much of the excess
as is surrendered as group relief under Part 5 of CTA 2010 or as
group relief for carried-forward losses under Part 5A of that Act.

(3B) A deduction in respect of the excess may be made under section 1219
for the next accounting period only on the making by the company
15of a claim.

(3C) A claim may relate to the whole of the excess or to part of it only.

(3D) A claim must be made—

(a) within the period of two years after the end of the next
accounting period, or

(b) 20within such further period as an officer of Revenue and
Customs may allow.

(3E) Subsection (1A) of section 1219 does not apply in relation to a
deduction in respect of the excess made for the next accounting
period.”

25Trading losses

7 Chapter 2 of Part 4 of CTA 2010 (trade losses) is amended as follows.

8 In section 36 (introduction to Chapter) for subsection (1) substitute—

(1) This Chapter provides relief for a loss made by a company in a trade
(see sections 37 to 47)”.

9 30For the italic heading before section 37 substitute—

“Relief in loss-making period and carry back relief".

10 (1) Section 45 (carry forward of trade loss against subsequent trade profits) is
amended as follows.

(2) In the heading, after “of” insert “pre-1 April 2017”.

(3) 35In subsection (1) after “accounting period” insert “beginning before 1 April
2017”.

(4) In subsection (4)(b) for “cannot be” substitute “is not”.

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(5) After subsection (4) insert—

(4A) But the company may make a claim that the profits of the trade of an
accounting period specified in the claim are not to be reduced by the
unrelieved loss, or are not to be reduced by the unrelieved loss by
5more than an amount specified in the claim.

(4B) A claim under subsection (4A) may specify an accounting period
only if it begins on or after 1 April 2017.

(4C) A claim under subsection (4A) is effective if, and only if, it is made—

(a) within the period of two years after the end of the accounting
10period specified in the claim, or

(b) within such further period as an officer of Revenue and
Customs may allow.”

(6) In subsection (5) for “section” (in the second place it occurs) substitute “,
sections 45B, 45F and”.

11 15After section 45 insert—

45A Carry forward of post-1 April 2017 trade loss against total profits

(1) This section applies if—

(a) in an accounting period (“the loss-making period”)
beginning on or after 1 April 2017 a company carrying on a
20trade makes a loss in the trade,

(b) relief under section 37 or Part 5 (group relief) is not given for
an amount of the loss (“the unrelieved amount”),

(c) the company continues to carry on the trade in the next
accounting period (“the later period”), and

(d) 25the conditions in subsection (3) are met.

(2) But this section does not apply if the trade is a ring fence trade.

(3) The conditions are that—

(a) the trade did not become small or negligible in the loss-
making period,

(b) 30relief under section 37 was not unavailable for the loss by
reason of —

(i) section 37(5), 44, 48 or 52, or

(ii) section 1209, 1216DA, 1217DA, 1217MA, 1217SA or
1218ZDA of CTA 2009,

(c) 35relief under section 37 would not be unavailable by reason of
section 44 for a loss (assuming there was one) made in the
trade in the later period,

(d) if the company is a Solvency 2 insurance company the loss is
not a shock loss (see subsections (9) and (10)), and

(e) 40the later period is not an excluded accounting period of a
general insurance company.

(4) The unrelieved amount is carried forward to the later period.

(5) The company may make a claim for relief to be given in the later
period for the unrelieved amount or for any part of it specified in the
45claim.

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(6) If the company makes a claim, the relief is given by deducting the
unrelieved amount, or the specified part of it, from the company’s
total profits of the later period.

(7) A claim under this section must be made—

(a) 5within the period of two years after the end of the later
period, or

(b) within such further period as an officer of Revenue and
Customs may allow.

(8) Relief under this section is subject to restriction or modification in
10accordance with provisions of the Corporation Tax Acts.

(9) For the purposes of this section and section 45B, a loss which is
partly, but not wholly, a shock loss is to be treated as if—

(a) the amount that is a shock loss, and

(b) the amount that is not,

15were separate losses.

(10) In this section—

  • “excluded accounting period” has the meaning given by section
    269ZG;

  • “general insurance company” is to be interpreted in accordance
    20with section 269ZG(6);

  • “ring fence trade” has the same meaning as in Part 8 (see section
    277);

  • “Solvency 2 insurance company” means an insurance company
    as defined in section 269ZP(2);

  • 25“shock loss” has the meaning given by section 269ZK.

45B Carry forward of post-1 April 2017 trade loss against trade profits

(1) This section applies if—

(a) in an accounting period (“the loss-making period”)
beginning on or after 1 April 2017 a company carrying on a
30trade makes a loss in the trade,

(b) relief under section 37 or 42 or Part 5 (group relief) is not
given for an amount of the loss (“the unrelieved amount”),

(c) the company continues to carry on the trade in the next
accounting period (“the later period”), and

(d) 35case 1, 2 or 3 applies.

Case 1 is that any of the conditions in section 45A(3) are not met.

Case 2 is that relief for the unrelieved amount was not available
under section 45A by reason of section 1210(5), 1216DB(5) or
1217DB(5) of CTA 2009.

40Case 3 is that the trade is a ring fence trade.

(2) The unrelieved amount is carried forward to the later period.

(3) Relief for the unrelieved amount is given to the company in the later
period if the company makes a profit in the trade in the later period.

(4) The relief is given by reducing the profits of the trade of the later
45period by the unrelieved amount.

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(5) But the company may make a claim for relief not to be given in the
later period for the unrelieved amount or for any part of it specified
in the claim.

(6) A claim under subsection (5) is effective if, and only if, it is made—

(a) 5within the period of two years after the end of the later
period, or

(b) within such further period as an officer of Revenue and
Customs may allow.

(7) If the trade is a ring fence trade, this section has effect only in relation
10to so much of the loss mentioned in subsection (1)(a) as is not a non-
decommissioning loss.

(8) Relief under this section is subject to restriction or modification in
accordance with provisions of the Corporation Tax Acts.

(9) In this section—

  • 15“non-decommissioning loss” is to be interpreted in accordance
    with section 303A;

  • “ring fence trade” has the same meaning as in Part 8 (see section
    277).

(10) See also section 45A(9) (splitting for the purposes of that section and
20this section of losses that are partly, but not wholly, shock losses of
insurance companies).

45C Re-application of section 45A if loss remains after previous
application

(1) This section applies if—

(a) 25an amount of a loss made in a trade is carried forward to an
accounting period (“the later period”) of a company under
section 45A(4),

(b) any of that amount is not deducted from the company’s total
profits of the later period on a claim under section 45A(5) or
30surrendered by way of group relief for carried forward-losses
under Part 5A,

(c) the company continues to carry on the trade in the
accounting period (“the further period”) after the later
period, and

(d) 35the conditions in subsection (2) are met.

(2) The conditions are that—

(a) the trade did not become small or negligible in the later
period,

(b) relief under section 37 would not be unavailable by reason of
40section 44 for a loss (assuming there was one) made in the
trade in the further period, and

(c) the further period is not an excluded accounting period of a
general insurance company.

(3) Subsections (4) to (8) of section 45A apply as if—

(a) 45references to the unrelieved amount were to so much of the
amount carried forward to the later period as is not deducted
or surrendered as mentioned in subsection (1)(b), and