Section 269ZK — Corporation Tax Act 2010: Meaning of “shock loss”: requirement to make a claim

Meaning of “shock loss”: requirement to make a claim 269ZK 1 If the conditions in subsection (3) are met, an insurance company may make a claim in respect of—

a a loss or other amount (the “specified loss”),

and b a period of 12 months (“ the specified period ”) which is a solvency shock period (see section 269ZM).

2 A claim may specify more than one 12 month period under subsection (1)(b) (but periods specified by an insurance company under this section may not overlap with one another).

3 The conditions are that—

a the accounting period (for corporation tax purposes) in which the specified loss arises (“the loss-making period”) begins on or after 1 April 2017, b the specified loss is, or is capable of being, carried forward to a subsequent accounting period, and c the loss-making period and the specified period have one or more days in common.

4 A claim under this section must be made within—

a the period of two years after the end of the loss-making period, or b such further period as an officer of Revenue and Customs allows.

5 If—

a a claim is made under this section, and b the whole of the loss-making period is, or falls within, the specified period, the specified loss is a “shock loss”.

6 If—

a a claim is made under this section, and b the loss-making period falls partly, but not wholly, in the specified period, the specified loss is a “shock loss” so far as it is attributable to the specified period.

7 For the purposes of subsection (6) the specified loss is “attributable to” the specified period in the proportion— P N Where P is the number of days of the loss-making period that fall within the specified period and N is the number of days in the loss-making period.

8 If the method in subsection (7) would produce a result that is unjust or unreasonable, the apportionment of the specified loss for the purposes of subsection (6) is to be made on a just and reasonable basis.