Section 269ZB — Corporation Tax Act 2010: Restriction on deductions from trading profits

Restriction on deductions from trading profits 269ZB 1 This section has effect for determining the taxable total profits of a company for an accounting period.

2 The sum of any deductions made by the company for the accounting period which fall within subsection (3) may not exceed the relevant maximum. But this is subject to subsection (10).

3 The following deductions fall within this subsection—

a any deductions under section 45(4)(b) or 45B;

b any deduction under section 303B(4) or 303D(5), so far as it is a restricted deduction.

4 For the purposes of this section a deduction under section 303B(4) or 303D(5) is a “restricted deduction” so far as it would not be available but for section 304(5) (reduction of income derived from related activities).

5 In this section the “ relevant maximum ” means the sum of—

a 50% of the company's relevant trading profits for the accounting period, and b the company's trading profits deductions allowance for the accounting period.

6 Section 269ZF contains provision for determining a company's relevant trading profits for an accounting period.

7 A company's “trading profits deductions allowance” for an accounting period—

a is so much of the company's deductions allowance for the period as is specified in the company's tax return as its trading profits deductions allowance for the period, and b accordingly, is nil if no amount of the company's deductions allowance for the period is so specified.

8 An amount specified under subsection (7)(a) as a company's trading profits deductions allowance for an accounting period may not exceed the difference between—

a the amount of the company's deductions allowance for the period, and b the total of—

i the amount of the company’s total non-trading profits deductions allowance for the period (see section 269ZC (3A) ),

and ii in the case of an insurance company, any amount specified for the period under section 269ZFC (5)(a) (BLAGAB deductions allowance). 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10 Subsection (2) does not apply in relation to a company for an accounting period where, in determining the company's relevant trading profits, the amount given by step 1 in section 269ZF(3) is not greater than nil.