Section 109 — Corporation Tax Act 2010: Restriction on losses etc surrenderable by dual resident

Restriction on losses etc surrenderable by dual resident 109 1 This section applies if in the surrender period the surrendering company is UK resident and is also within a charge to non-UK tax under the law of a territory because—

a it derives its status as a company from that law, b its place of management is in that territory, or c it is for some other reason treated under that law as resident in that territory for the purposes of that tax.

2 If condition A, B or C is met, the surrendering company may not surrender any losses or other amounts under this Chapter.

3 Condition A is that the surrendering company is not a trading company throughout the surrender period.

4 Condition B is that in the surrender period the surrendering company carries on a trade of such a description that the company's main function, or one of its main functions, consists of one or more of the following activities. Activity 1 Acquiring and holding shares, securities or investments of any other kind (whether directly or indirectly). Activity 2 Making, under loan relationships, payments in relation to which debits fall to be brought into account for the purposes of Part 5 of CTA 2009. Activity 3 Making payments which are qualifying charitable donations. Activity 4 Making payments similar to those within Activity 3 but which are deductible in calculating the profits of the surrendering company for corporation tax purposes. Activity 5 Obtaining funds for the purposes of, or otherwise in connection with, any of Activities 1 to 4.

5 Condition C is that in the surrender period the surrendering company carries on one or more of Activities 1 to 5—

a to an extent that does not appear to be justified by any trade which it carries on, or b for a purpose that does not appear to be appropriate to any such trade.