Corporation Tax Act 2009

390 Meaning of “available profits”

(1) For the purposes of section 389 the available profits of the company for an accounting period are its BLAGAB non-trading loan relationships profits for the period (see subsection (4)), less the unused part of the relevant deductions for the period (see subsection (5)).

(2) If an accounting period ending within the permitted period begins before it, only a part of the amount which would otherwise be the available profit for that accounting period is available profit.

(3) That part is so much as is proportionate to the part of the accounting period in the permitted period.

(4) References in this section to a company’s BLAGAB non-trading loan relationships profits for an accounting period are references to the amount (if any) which is chargeable to tax for that period under section 299 (charge to tax on non-trading profits) for the company’s BLAGAB.

(5) The unused part of the relevant deductions for an accounting period is found as follows.

• Step 1

  Add together—

  (a)

  so much of the expenses deduction for the period given by Step 8 in section 76(7) of ICTA (expenses of insurance companies) as is referable to BLAGAB, and

  (b)

  so much of the sum of the deductions made in the case of the company in respect of charges on income for that period as is so referable.

• Step 2

  Add together—

  (a)

  the total amounts so referable which could be applied for the period in making deductions as a result of section 76 of ICTA if the company’s BLAGAB non-trading loan relationships profits for the period were disregarded, and

  (b)

  the total amounts so referable which could be applied for the period in making deductions in respect of charges on income if those profits were disregarded.

• Step 3

  Subtract the amount found at Step 2 from the amount found at Step 1.

  The result is the unused part of the relevant deductions for the accounting period.

(6) In the case of any claim under section 389, the reference in Step 1(a) in subsection (5) to the expenses deduction for an accounting period given by Step 8 in section 76(7) of ICTA and the reference in Step 2(a) in subsection (5) to the deduction for expenses as a result of section 76 of ICTA for an accounting period are references to the deduction for expenses that would have been made as a result of that section for that period on the assumptions in subsections (7) and (8).

(7) The first assumption is that no account is taken of—

(a) that claim, or

(b) any other claim under section 389 relating to a deficit for an accounting period after the deficit period.

(8) The second assumption is that all such adjustments are made as are required as a result of any sum having been carried back under the Corporation Tax Acts to the accounting period mentioned in subsection (5), otherwise than as a result of—

(a) the claim mentioned in subsection (6), or

(b) any such other claim as is mentioned in subsection (7)(b).