Finance Bill (HC Bill 102)

Finance BillPage 290

(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
5obtained.

(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
10(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) 15In 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
20unavailable 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) 25In 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) 30in 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”.

134 35In section 1056 (amount of trading loss which is “unrelieved”)—

(a) in subsection (2)(c) after “Part 5” insert “or Part 5A”, and

(b) in subsection (3)(a) after “45” insert “, 45A or 45B”.

135 In section 1062(2) (restriction on losses carried forward where R&D tax
credit claimed)—

(a) 40for “section 45” substitute “sections 45, 45A and 45B”, and

(b) omit “trading” in the second place that word occurs.

136 In section 1116 (meaning of “the actual reduction in tax liability”) in
subsection (4) after “Part 5” insert “or Part 5A”.

137 In section 1153 (amount of loss which is “unrelieved”)—

(a) 45in subsection (1)(c) after “Part 5” insert “or Part 5A”, and

(b) in subsection (2)(a) after “45” insert “, 45A, 45B”.

Finance BillPage 291

138 In section 1158(2) (restriction on losses carried forward where land
remediation tax credit claimed)—

(a) for “section 45” substitute “sections 45, 45A and 45B”, and

(b) omit “trading” in the second place that word occurs.

139 5In section 1201 (film tax credit claimable if company has surrenderable loss)
in subsection (2B)(b) after “45” insert “or 45B”.

140 In section 1216CH (television tax credit claimable if company has
surrenderable loss) in subsection (4)(b) after “45” insert “or 45B”.

141 In section 1217CH (video game tax credit claimable if company has
10surrenderable loss) in subsection (4)(b) after “45” insert “or 45B”.

142 In section 1217KA (theatre tax credits: amount of surrenderable loss) in
subsection (3)(b) after “45” insert “or 45B”.

143 In section 1217RH (orchestra tax credits: amount of surrenderable loss) in
subsection (3)(b) after “45” insert “or 45B”.

144 15In section 1223 (carry forward expenses of management and other amounts),
in subsection (1)(b), after sub-paragraph (i) (as inserted by paragraph
6(2)(b)) insert—

(“ii) section 269ZD of CTA 2010 (restrictions on
deductions from total profits) has effect for the
20accounting period, or

(iii) ”.

CTA 2010

145 CTA 2010 is amended as follows.

146 (1) Section 1 (overview of Act) is amended as follows.

(2) 25In subsection (2) (list of reliefs provided by Parts 4 to 7) after paragraph (f)
insert—

(fa) group relief for carried-forward losses (see Part 5A),”

(3) After subsection (2) insert—

(2A) Part 7ZA contains provision restricting the amount of certain
30deductions which may be made in calculating the profits of a
company on which corporation tax is chargeable.”

147 (1) Section 17 (interpretation of Chapter 4 of Part 2) is amended as follows.

(2) In subsection (2) (meaning of “carried-back amount”)—

(a) after paragraph (a) insert—

(aa) 35an amount carried back under section 45F (relief for
terminal trade losses),”, and

(b) in paragraph (c) after “459(1)(b)” insert “or 463B(1)(b)”.

(3) In subsection (3) (meaning of “carried-forward amount”)—

(a) in paragraph (a) after “forward of” insert “pre-1 April 2017”,

(b) 40after paragraph (a) insert—

(aa) an amount carried forward under section 45A (carry
forward of post 1-April 2017 trade loss against total
profits),

Finance BillPage 292

(ab) an amount carried forward under section 45B (carry
forward of post-1 April 2017 trade loss against
subsequent trade profits),”, and

(c) in paragraph (i) after “457(3)” insert “, 463G(6) or 463H(4)”.

148 (1) 5Section 46 (use of trade-related interest and dividends if insufficient trade
profits) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies if in an accounting period a company carrying
on a trade makes a loss in the trade and either—

(a) 10relief for the loss could be given in a later accounting period
under section 45(4)(b) or 45B(4) but for the fact that there are
no profits of the trade of the later accounting period, or

(b) the amount of relief for the loss that could be given in a later
accounting period under section 45(4)(b) or 45B(4) is limited
15by reason of the amount of profits of the trade of the later
accounting period.”

(3) In subsection (2) at the beginning insert “For the purposes of section 45 and
45B,”.

149 In section 47 (registered societies), in subsection (1), for “section 45”
20substitute “sections 45 and 45B”.

150 In section 53 (leasing contracts and company reconstructions), in subsection
(1)(e), for “or 45” substitute “, 45, 45A or 45B”.

151 In section 54 (non-UK resident company: receipts of interest, dividends or
royalties), in subsection (2), for “or 45” substitute “, 45, 45A or 45B”.

152 (1) 25Section 56 (restriction on reliefs for limited partners) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (a) after “37” insert “or 45A”,

(b) omit “or” at the end of paragraph (a), and

(c) after paragraph (b) insert , or

(c) 30under Part 5A (group relief for carried-forward
losses)”.

(3) In subsection (4)—

(a) after “37” insert “or 45A”, and

(b) after “5” insert “or 5A”.

153 (1) 35Section 59 (restriction on relief for members of LLPs) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (a) after “37” insert “or 45A”,

(b) omit “or” at the end of paragraph (a), and

(c) after paragraph (b) insert , or

(c) 40under Part 5A (group relief for carried-forward
losses)”.

(3) In subsection (4)—

(a) after “37” insert “or 45A”, and

(b) after “5” insert “or 5A”.

Finance BillPage 293

154 (1) Section 61 (unrelieved losses of member of LLP brought forward) is
amended as follows.

(2) In subsection (1), in the words before paragraph (a), for “This section”
substitute “Subsection (2)”.

(3) 5After subsection (2) insert—

(2A) Subsection (2B) applies if—

(a) a company (“the member company”) carries on a trade as a
member of an LLP at a time during an accounting period
(“the current period”), and

(b) 10as a result of section 59, relief under section 45A or Part 5A
(group relief for carried forward losses) has not been given
for an amount of loss made in the trade by the member
company as a member of the LLP in a previous accounting
period.

(2B) 15For the purposes of determining the relief under section 45A or Part
5A to be given to any company, the amount of loss is treated as
having been made by the member company in the current period so
far as it is not excluded by subsection (3) or (4).”

(4) In subsection (3)—

(a) 20after “37” insert “or 45A”, and

(b) after “Part 5” insert “or Part 5A”.

155 (1) Chapter 4 of Part 4 (property losses) is amended as follows.

(2) In section 65 (UK furnished holiday lettings business treated as trade) for
subsection (4A) substitute—

(4A) 25Chapter 2 applies as if the following were omitted—

(a) sections 37 to 44,

(b) the words “beginning before 1 April 2017” in section 45(1),

(c) sections 45A to 45H, and

(d) sections 48 to 54.

(4B) 30Any deduction made under section 45(4)(b) from the profits of the
trade treated as carried on under this section is to be ignored for the
purposes of section 269ZB (restriction on deductions from trading
profits).”

(3) In section 67A (EEA furnished holiday lettings business treated as trade) for
35subsection (5) substitute—

(5) Chapter 2 applies as if the following were omitted—

(a) sections 37 to 44,

(b) the words “beginning before 1 April 2017” in section 45(1),

(c) sections 45A to 45H, and

(d) 40sections 48 to 54.

(5A) Any deduction made under section 45(4)(b) from the profits of the
trade treated as carried on under this section is to be ignored for the
purposes of section 269ZB (restriction on deductions from trading
profits).”

Finance BillPage 294

156 (1) Section 95 (write-off of government investment: meaning of “carry forward
losses”) is amended as follows.

(2) In subsection (1), in Type 1, after “45,” insert “45A, 45B,”.

(3) In subsection (2) after “(group relief)” insert “or Part 5A (group relief for
5carried forward losses)”.

157 In section 99 (surrendering of losses and other amounts) in subsection (1)(c)
after “16” insert “or 16A”.

158 In section 104 (meaning of “non-trading loss on intangible fixed assets” for
purposes of section 99(1)(g)), for subsection (2) substitute—

(2) 10But it does not include a loss treated as a non-trading loss on
intangible fixed assets for the surrender period as a result of section
753(3) of CTA 2009.”

159 In section 137 (giving of group relief: deduction from total profits) in
subsection (5) (list of deductions to be made after group relief is given)—

(a) 15omit “and” at the end of paragraph (b),

(b) in paragraph (c) for “or 459” substitute “, 459 or 463B”, and

(c) after paragraph (c) insert , and

(d) under section 188CK (giving of group relief for
carried-forward losses: deductions from total
20profits)”.

160 In section 189(2) (relief for qualifying charitable donations) at the end insert
“and group relief for carried-forward losses”.

161 In section 269DA (surcharge on banking companies) in subsection (2)
(calculation of “surcharge profits”)—

(a) 25in the formula, after “NBGR+” insert “NBGRCF+”, and

(b) after the definition of “NBGR” insert—

  • “NBGRCF” is the amount (if any) of non-banking group
    relief for carried-forward losses that is given in
    determining those taxable total profits (see section
    30269DBA);”.

162 After section 269DB insert—

269DBA Meaning of “non-banking group relief for carried-forward losses”

(1) In section 269DA(2) “non-banking group relief for carried-forward
losses” means group relief for carried-forward losses that relates to
35losses or other amounts that the surrendering company has for a
surrender period in relation to which it is not a banking company.

(2) In this section “surrendering company” and “surrender period” have
the same meaning as in Part 5A (see section 188FD).”

163 (1) Section 269DC (surcharge on banking companies: meaning of “non-banking
40or pre-2016 loss relief) is amended as follows.

(2) In subsection (3)(b)—

(a) after “45” insert “, 45A or 45B”, and

(b) omit “trade” in the second place that word occurs.

(3) In subsection (4)(b)—

Finance BillPage 295

(a) after “457” insert “, 463G or 463H”, and

(b) omit “non-trading”.

(4) Omit subsection (5).

164 In section 385 (sales of lessors: no carry back of loss against the income) in
5subsection (2) after “periods)” insert “or section 45F (relief for terminal trade
losses)”.

165 In section 398D (sales of lessors: restrictions on use of losses etc) after
subsection (2) insert—

(2A) Group relief for carried-forward losses is not to be given under Part
105A against so much of the total profits of A as are attributable to the
carrying on of the relevant activity.”

166 In section 427 (sales of lessors: no carry back of loss against the income) in
subsection (2) after “periods)” insert “or section 45F (relief for terminal trade
losses)”.

167 (1) 15Chapter 5 of Part 9 (sales of lessors: anti-avoidance provisions) is amended
as follows.

(2) In section 432 (introduction to section 433)—

(a) in subsection (1), in the words before paragraph (a), for “Section 433
applies” substitute “Sections 433 and 433A apply”, and

(b) 20in subsection (2) after “that section” insert “and section 433A”.

(3) In section 433 (restrictions on relief for expenses treated as incurred under
Chapter 3 or 4)—

(a) in subsection (3)—

(i) in paragraph (a) after “of” insert “pre-1 April 2017”,

(ii) 25after that paragraph insert—

(ab) section 45B (carry forward of post-1 April
2017 trade loss against subsequent trade
profits),

(b) in subsection (5) after “profits)” insert “or section 45A (carry forward
30of trade loss against total profits)”, and

(c) in subsection (6)—

(i) after “set off” insert

(a) ”, and

(ii) at the end insert , or

(b) 35by way of group relief for carried-forward
losses in accordance with Chapter 2 of Part 5A
(surrender of company’s carried forward
losses)”.

(4) After section 433 insert—

433A 40 Restrictions not applying to the restricted loss amount

(1) Any deduction made under section 45 or 45B in respect of the
restricted loss amount is to be ignored for the purposes of the
restriction in section 269ZB (restriction on sum of deductions from
trading profits).

Finance BillPage 296

(2) Any deduction made under section 62 or 63 in respect of the
restricted loss amount is to be ignored for the purposes of the
restriction in section 269ZD (restriction on sum of deductions from
total profits).”

168 5In section 599 (real estate investment trusts: calculation of profits) after
subsection (8) insert—

(9) No account is to be taken of Part 7ZA of this Act (restrictions on
obtaining certain deductions in respect of carried-forward losses).”

169 In section 601 (availability of group reliefs to a group UK REIT) in subsection
10(2)—

(a) omit “and” at the end of paragraph (f), and

(b) after paragraph (g) insert , and

(h) Part 5A of this Act (group relief for carried-forward
losses)”.

170 15In section 705E (shell companies: restriction on relief for non-trading loss on
intangible fixed assets), in subsection (3)(b), for “debit of” substitute “loss on
intangible fixed assets for”.

171 In section 705F(2) (shell companies: apportionment of amounts), in column
1 of the table—

(a) 20in row 4, after “457(1)” insert “, 463G or 463H”,

(b) in row 4, omit “basic rule for deficits:”,

(c) in row 5, omit from “, but excluding” to the end, and

(d) in row 6, omit from “and treated” to the end.

172 In section 730C (disallowance of deductible amounts: relevant claims) in
25subsection (2) (meaning of “relevant claim”)—

(a) omit “or” at the end of paragraph (a),

(b) after paragraph (a) insert—

(aa) section 45A (carry forward of post-1 April 2017 trade
loss against total profits),” and

(c) 30after paragraph (b) insert , or

(c) Chapter 3 of Part 5A (group relief for carried-forward
losses)”.

173 (1) Section 888 (restrictions on leasing partnership losses) is amended as
follows.

(2) 35In subsection (3) after “37” insert “or 45A”.

(3) In subsection (4)—

(a) after “set off” insert

(a) ”, and

(b) at the end insert , or

(b) 40by way of group relief for carried-forward losses in
accordance with Chapter 2 of Part 5A (surrender of
company’s carried-forward losses etc)”.

(4) In subsection (6) in the definition of “relevant loss relief provision”—

(a) in paragraph (a) after “of” insert “pre-1 April 2017”, and

Finance BillPage 297

(b) after that paragraph insert—

(ab) section 45B (carry forward of post-1 April 2017 trade
loss against subsequent trade profits),”.

174 (1) Schedule 4 (index of defined expressions) is amended as follows.

(2) 5At the appropriate places insert—

“the claimant company (in
Part 5A)
section 188FD”
“the claim period (in Part 5A) section 188FD”
“company (in Part 5A) section 188FD”
“group relief for carried-
forward losses”
10section 188AA(4)”
“holding company (in Part
5A)
section 188FC(2)”
“member of a consortium (in
Part 5A)
section 153(2) (applied by
15section 188FB)”
“member of the same group
of companies (in Part 5A)
section 152 (applied by
section 188FB)”
“owned by a consortium (in
Part 5A)
section 153(1) and (3) (applied
by section 188FB)”
“profits (in Part 5A) 20section 188FD”
“the specified loss-making
period” (in Part 5A)
section 188FD”
“75% subsidiary (in Part 5A) section 151 (applied by
section 188FB)”
“the surrenderable amounts
(in Part 5A)
25section 188FD”
“the surrendering company
(in Part 5A)
section 188FD
“the surrender period (in Part
5A)
section 188FD”
30
“trade (in Part 5A) section 188FD”
“trading company (in Part
5A)
section 188FC(1)”

(3) In the entry for “75% subsidiary (except in Part 5)” after “Part 5” insert “and
35Part 5A”.

TIOPA 2010

175 TIOPA 2010 is amended as follows.

Finance BillPage 298

176 In section 54 (double taxation relief by way of credit: non-trading debits on
loan relationships) in subsection (7)—

(a) in paragraph (b) of the definition of “carry-back claim”, after
“459(1)(b)” insert “or 463B(1)(b)”,

(b) 5in paragraph (b) of the definition of “carry-forward provision”, after
“457(1)” insert “, 463G(5) or 463H(4)”, and

(c) in paragraph (b) of the definition of “current-year provision or
claim”, after “459(1)(a)” insert “or 463B(1)(a)”.

177 In section 55 (double taxation relief by way of credit: current year’s non-
10trading deficits on loan relationships)—

(a) in subsection (4)(b), after “459(1)(a)” insert “or 463B(1)(a)”, and

(b) in subsection (5), for “or 459(1)(a)” substitute “, 459(1)(a) or
463B(1)(a)”.

178 In section 156(1) (meaning of “losses” in Part 4)—

(a) 15in paragraph (e) after “Chapter 16” insert “or Chapter 16A”,

(b) omit “or” at the end of paragraph (f), and

(c) after paragraph (g) insert , or

(h) Part 5A of CTA 2010 (group relief for carried-forward
losses).”

179 20In section 371IF (determining the profits of a CFC’s qualifying loan
relationship), in paragraph (b) of step 5, after “16” insert “or Chapter 16A”.

180 After section 371SK insert—

371SKA Restrictions on certain deductions: deductions allowances

(1) This section applies for the purposes of—

(a) 25applying Part 7ZA of CTA 2010 (restrictions on obtaining
certain deductions), and

(b) applying any provision of Part 7ZA of CTA 2010 for the
purposes of Part 7A of that Act (restrictions on obtaining
certain deductions: banking companies).

(2)
30Assume that each of the following is nil—

(a) the CFC’s deductions allowance for the relevant accounting
period,

(b) the CFC’s trading profits deductions allowance for the
relevant accounting period, and

(c) 35the CFC’s non-trading profits deductions allowance for the
relevant accounting period.

(3) But if section 269ZX of CTA 2010 (increase of deductions allowance
where provision for onerous lease reversed) applies in relation to the
relevant accounting period, the reference in subsection (2) to “nil” is
40to be read as a reference to an amount equal to the increase provided
for by subsection (3) of that section.”

181 In subsection (2)(a) of section 371SL (group relief etc)—

(a) after “(group relief)” insert “or Part 5A of that Act (group relief for
carried-forward losses)”, and

(b) 45after “by way of group relief” insert “or group relief for carried-
forward losses”.

Finance BillPage 299

F (No. 3) A 2010

182 (1) In paragraph 10 of Schedule 9 to F(No.3)A 2010 (interest), the new Part A1
to be inserted into Schedule 54 to FA 2009 is amended as follows.

(2) In paragraph A1 (interest on tax repaid as a result of carrying back a non-
5trading deficit on company’s loan relationships)—

(a) in sub-paragraph (1)(c) for “or 459(1)(b)” substitute “, 459(1)(b) or
463B(1)(b)”, and

(b) in sub-paragraph (2) for “or 459(1)(b)” substitute “, 459(1)(b) or
463B(1)(b)”.

(3) 10After paragraph A2 insert—

A2A (1) This paragraph applies where—

(a) a company has profits arising in an accounting period
(“the earlier period”),

(b) the company ceases to carry on a trade in a later accounting
15period (“the later period”),

(c) on a claim under section 45F of CTA 2010 (terminal losses),
the whole or any part of a loss incurred in the trade has
been set off for the purposes of corporation tax against the
profits of the earlier period,

(d) 20the earlier period does not fall wholly within the period of
12 months immediately preceding the later period, and

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

(2) 25So much of the repayment mentioned in sub-paragraph (1)(e) as
falls to be made as a result of the claim under section 45F does not
carry repayment interest.

(3) But sub-paragraph (2) does not apply (and, accordingly, the
amount mentioned in that sub-paragraph carries repayment
30interest) after the expiry of 9 months from the end of the later
period.”

(4) In paragraph A3 (interest on tax repaid as a result of a claim under section
77 of TIOPA 2010) in sub-paragraph (4) after “A4” insert “or A5”.

(5) After paragraph A4 insert—

A5 (1) 35This paragraph applies where—

(a) a company has profits arising in an accounting period
(“the middle period”),

(b) the company ceases to carry on a trade in a later accounting
period (“the later period”),

(c) 40on a claim under section 45F of CTA 2010 (terminal losses),
the whole or any part of a loss incurred in the trade has
been set off for the purposes of corporation tax against the
profits of the middle period,

(d) the middle period does not fall wholly within the period of
4512 months immediately preceding the later period,

(e) as a result of the claim under section 45F, an excess or
increased excess arises in the middle period as described in