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Corporation Tax (Northern Ireland) Act 2015

Chapter 3

16.Chapter 3 provides for corporation tax to be charged at the Northern Ireland rate on Northern Ireland profits as distinct from mainstream profits. It also provides for the existing rules on loss reliefs to be modified to deal with the existence of different rates of corporation tax.

17.Section 357JA charges Northern Ireland profits to corporation tax at the Northern Ireland rate. Section 357JB provides for the way in which loss relief under section 37 of CTA 2010 (relief for trade losses against total profits) works if a company has Northern Ireland losses or mainstream losses. If it has both types of loss in a single period, relief is available separately for each. A Northern Ireland loss is to be relieved, so far as possible, first against Northern Ireland profits before relief is given against mainstream profits. Likewise, a mainstream loss is to be relieved first so far as possible against mainstream profits before being relieved against Northern Ireland profits.

18.If a Northern Ireland loss is to be set against mainstream profits and at any time during the accounting period the Northern Ireland rate is lower than the main rate, Chapter 3 provides for that loss to be taken into account by reference to a formula at section 357JJ in order to reflect the difference between the Northern Ireland rate and the main corporation tax rate. The loss carry forward, group and consortium relief rules are similarly modified.

19.Section 357JH modifies Chapter 4 of Part 5 of CTA 2010, (claims for group relief), so that claims made by reference to “available total profits” are made, in the context of a revalued Northern Ireland loss, by reference to the deduction given by the revalued Northern Ireland loss against the available total profits.

20.Section 357JI provides that the reference to a loss in section 944(2) and (3), which concern the transfer of a trade without a change in ownership, has effect as if the reference to a loss made by the predecessor in the transferred trade were to the Northern Ireland loss or mainstream loss of the transferred trade as appropriate. That treatment is sustained in the successor company.

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