Section 725 — Corporation Tax Act 2009: Reversal of previous accounting loss

Reversal of previous accounting loss 725 1 This section applies if—

a in a period of account a gain is recognised in determining the company's profit or loss (“the recognised gain”),

b the gain wholly or partly reverses a loss recognised in a previous period of account (“the reversed loss”),

and c a debit was brought into account for tax purposes under Chapter 3 (debits in respect of intangible fixed assets) in respect of that loss (“the tax debit”).

2 A corresponding credit must be brought into account for tax purposes.

3 The amount of the credit is— RG × D RL where— RG is the recognised gain, D is the tax debit, and RL is the reversed loss.

4 This section does not apply to a gain on a revaluation within the meaning of section 723 (see subsection (5) of that section).