Finance Act 2003

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Chapter 4

Corporation Tax

Provisions relating to loss relief.

59.—(1) The Principal Act is amended—

(a)  in section 243B(4)(b) (inserted by the Finance Act 2002 ), by substituting “The” for “Subject to paragraph (c), the”,

(b)  in section 396A (inserted by the Finance Act 2001 ), by inserting the following after subsection (4):

“(5) A claim under subsection (3) shall be made within 2 years from the end of the accounting period in which the loss is incurred.”,

(c)  in section 396B (inserted by the Finance Act 2002 )—

(i) in subsection (2) by substituting “amounts which could, if a timely claim for such set off had been made by the company, have been set off” for “amounts set off”, and

(ii) by inserting the following after subsection (5):

“(6) A claim under subsection (2) shall be made within 2 years from the end of the accounting period in which the loss is incurred.”,

(d)  in section 420B (inserted by the Finance Act 2002 ) by substituting the following for subsection (2):

“(2) Where in any accounting period the surrendering company has incurred a relevant trading loss, computed as for the purposes of section 396(2), or an excess of relevant trading charges on income, in carrying on a trade in respect of which the company is within the charge to corporation tax, and the amount of the loss or excess is greater than an amount equal to the aggregate of the amounts which could, if timely claims had been made for such set off, have been set off in respect of that loss or excess for the purposes of corporation tax against—

(a)  the income of the company in accordance with section 243A or section 396A,

(b)  the income of the company from the sale of goods in accordance with section 454 or 455, and

(c)  income of any other company in accordance with section 420A or 456,

the claimant company may claim relief under this section for its corresponding accounting period in respect of the amount (in this section referred to as the ‘relievable loss’) by which the loss or excess is greater than that aggregate.”,

and

(e)  in section 1085 in subsection (2)—

(i) in paragraph (a) by inserting “, 396A(3)” after “396(2)”,

(ii) by inserting the following after paragraph (b):

“(ba) the total amount of the relevant trading loss referred to in subsection (2) of section 396B for the chargeable period shall be treated for the purposes of that section as reduced by 50 per cent,”,

and

(iii) by inserting the following after paragraph (c):

“(ca)  the total amount of the loss or excess referred to in subsection (3) of section 420A for the chargeable period shall be treated for the purposes of Chapter 5 of Part 12 as reduced by 50 per cent,

(cb)  the total amount of the relevant trading loss referred to in subsection (2) of section 420B for the chargeable period shall be treated for the purposes of Chapter 5 of Part 12 as reduced by 50 per cent,”.

(2) This section applies—

(a)  subject to paragraph (b), as respects accounting periods ending on or after 6 February 2003, and

(b)  in the case of paragraphs (c)(i) and (d) of subsection (1), as respects a claim under section 396B, or as the case may be section 420B, made on or after 6 February 2003.