Part 3

Trading income
Chapter 12

Deductions from profits: unremittable amounts

Withdrawal of relief
175
1
This section applies if—
a
some or all of an unremittable amount has been deducted from profits under section 173, and
b
any of the following events occurs.
2
The events are that—
a
the amount or part of it ceases to be unremittable,
b
an allowable provision for impairment loss is made in respect of the amount or part of it,
c
the amount or part of it is used to finance expenditure or investment outside the United Kingdom,
d
the amount or part of it is applied outside the United Kingdom in another way,
e
the amount or part of it is exchanged for, or discharged by, an amount that is not unremittable, and
f
if the amount is an amount owed, a payment under a contract of insurance is received in relation to the amount or part of it.
3
The amount or the part of it in question is brought into account as a receipt in calculating the profits of the trade of the period of account in which the event occurs, but only so far as—
a
it has been deducted from profits under section 173, and
b
it has not already been brought into account as a receipt in calculating the profits of the trade as a result of this section.
4
If the event is the receipt of a payment under a contract of insurance, the amount brought into account as a receipt must not exceed the amount of the payment.
5
In subsection (2)(b) “allowable provision for impairment loss” means either—
a
a debit in respect of the impairment of a financial asset (see section 476(1)) which is brought into account under Part 5 (loan relationships), or
b
a provision in respect of which a deduction is allowable under section 55 (bad debts).
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)