Part 5Group relief
Chapter 2Surrender of company’s losses etc for an accounting period
Restrictions on losses and other amounts that may be surrendered
107Restriction on losses etc surrenderable by non-UK resident
1
This section applies if the surrendering company is a non-UK resident company carrying on a trade in the United Kingdom through a permanent establishment.
2
The surrendering company may surrender a loss or other amount under this Chapter only so far as conditions A, B and C are met in relation to the loss or other amount.
3
Condition A is that the loss or other amount is attributable to activities of the surrendering company in respect of which it is within the charge to corporation tax for the surrender period.
4
Condition B is that the loss or other amount is not attributable to activities of the surrendering company that are double taxation exempt for the surrender period (see section 186).
5
Condition C is that—
a
the loss or other amount does not correspond to, and is not represented in, an amount within subsection (6), and
b
no amount brought into account in calculating the loss or other amount corresponds to, or is represented in, an amount within subsection (6).
6
An amount is within this subsection if, for the purposes of non-UK tax chargeable under the law of a territory, the amount is (in any period) deductible from or otherwise allowable against non-UK profits of any person.
7
But an amount is not to be taken to be within subsection (6) by reason only that it is—
a
an amount of profits brought into account for the purpose of being excluded from non-UK profits of the person, or
b
an amount brought into account in calculating an amount of profits brought into account as mentioned in paragraph (a).
8
Subsection (9) applies for the purposes of subsection (6) if, in order to determine if an amount is deductible or otherwise allowable for the purposes of non-UK tax chargeable under the law of a territory, it is necessary under that law to know if the amount (or a corresponding amount) is deductible or otherwise allowable for tax purposes in the United Kingdom.
9
The amount is to be treated as deductible or otherwise allowable for the purposes of the non-UK tax chargeable under the law of the territory concerned.