Finance Act 2014

Straddling accounting periods

10 (1) For the purpose of determining the amount of activated allowance the company has with respect to any site—

(a) for the straddling accounting period (see section 356E of CTA 2010, as inserted by paragraph 3), or

(b) for a reference period that is part of the straddling accounting period (see section 356GB of CTA 2010, as so inserted),

the company’s relevant income from the site in the straddling accounting period is taken to be the appropriate proportion of the actual amount of that relevant income.

(2) Accordingly, in relation to the company, the straddling accounting period and the site in question, section 356EB of CTA 2010 (carrying forward of unactivated allowance) has effect as if Y in subsection (1) of that section were defined as the appropriate proportion of the company’s relevant income for the straddling accounting period from that site.

(3) The “appropriate proportion” of the company’s relevant income from a site in the straddling accounting period is—

• D is the number of days in the straddling accounting period that fall on or after commencement day;

• Y is the number of days in the straddling accounting period;

• I is the amount of the company’s relevant income from the site in the straddling accounting period.

(4) If the basis of apportionment in sub-paragraph (3) would work unjustly or unreasonably in the company’s case, the company may elect for its adjusted ring fence profits to be apportioned on another basis that is just and reasonable and specified in the election.