Corporation Tax Act 2010

Basic provisions about surrendering losses and other amounts

99 Surrendering of losses and other amounts

(1) This section applies if a company has one or more of the following for an accounting period—

(a) a trading loss (see section 100),

(b) a capital allowance excess (see section 101),

(c) a deficit within Chapter 16 of Part 5 of CTA 2009 (non-trading deficit on loan relationship),

(d) amounts allowable as qualifying charitable donations (see Part 6),

(e) a UK property business loss (see section 102),

(f) management expenses (see section 103), and

(g) a non-trading loss on intangible fixed assets (see section 104).

(2) The company may surrender the losses and other amounts under this Chapter so far as the losses and other amounts are eligible for corporation tax relief (apart from this Part).

(3) Subsection (2) applies in relation to losses and other amounts within subsection (1)(a) to (c) even if the company has other profits in the accounting period mentioned in subsection (1) from which the losses and other amounts could be deducted.

(4) But so far as losses and other amounts are within subsection (1)(d) to (g), subsection (2) is subject to the restriction in section 105.

(5) Subsection (2) is also subject to—

(a) sections 106 to 110 (which place further restrictions on what the surrendering company may surrender),

(b) sections 432 and 433 (which restrict relief for expenses treated as incurred under Chapter 3 or 4 of Part 9), and

(c) sections 887 and 888 (which restrict relief in certain cases involving partnership losses in a business of leasing plant or machinery).

(6) Under paragraph 70(1) of Schedule 18 to FA 1998, the company surrenders losses or other amounts, so far as eligible for surrender under this Chapter, by consenting to one or more claims for group relief in relation to the amounts (see Requirement 1 in section 130).

(7) In this Part, in relation to losses or other amounts within subsection (1) that a company has for an accounting period—

• “the surrenderable amounts” means the losses or other amounts so far as eligible for surrender under this Chapter,

• “surrendering company” means the company that has the losses or other amounts, and

• “the surrender period” means the accounting period for which the company has the losses or other amounts.

100 Meaning of “trading loss”

(1) In section 99(1)(a) “trading loss” means a loss made in a trade in the surrender period.

(2) But it does not include—

(a) a loss made in a trade carried on wholly outside the United Kingdom, or

(b) a loss that is not eligible for relief under section 37 as a result of section 44 or 48.

101 Meaning of “capital allowance excess”

(1) In section 99(1)(b) “capital allowance excess” means an excess of the kind mentioned in section 260(1) of CAA 2001 for the surrender period.

(2) In determining if there is such an excess for the surrender period and, if there is, its amount, apply section 260(1) of CAA 2001 but subject to subsections (3) and (4).

(3) Capital allowances brought forward from previous accounting periods are to be ignored.

(4) The reference in section 260(1) of CAA 2001 to a description of the company’s income is to be read as a reference to that description of income before deductions for—

(a) losses of any accounting period other than the surrender period, or

(b) capital allowances.

102 Meaning of “UK property business loss”

(1) In section 99(1)(e) “UK property business loss” means a loss made in a UK property business in the surrender period.

(2) But it does not include a loss treated as made in the surrender period as a result of section 62(5).

103 Meaning of “management expenses”

(1) In section 99(1)(f) “management expenses” means expenses that are deductible for the surrender period under section 1219 of CTA 2009.

(2) But it does not include—

(a) expenses that are deductible for the surrender period as a result of section 1223 of CTA 2009, or

(b) amounts treated as expenses deductible for the surrender period as a result of section 63 above.

104 Meaning of “non-trading loss on intangible fixed assets”

(1) In section 99(1)(g) “non-trading loss on intangible fixed assets” is to be read in accordance with Part 8 of CTA 2009.

(2) But so much of such a loss as is made up of an amount carried forward under section 753(3) of CTA 2009 is excluded from the scope of section 99(1)(g).