Section 323 — Corporation Tax Act 2010: Ring fence losses

Ring fence losses 323 1 If—

a in any post-commencement period (“the period of the loss”) a qualifying company carrying on a ring fence trade incurs a loss in the trade, and b some or all of the loss falls to be carried forward to the following accounting period under section 45, 45B or 303B (carry forward of trade losses against subsequent profits) so much of the loss as falls to be so carried forward is a “ring fence loss” of the company.

2 In determining for the purposes of the post-commencement supplement provisions how much of a loss incurred in a ring fence trade falls to be carried forward as mentioned in subsection (1)(b), the following assumptions are to be made.

3 The first assumption is that every claim is made that could be made by the company under section 37 (relief for trade losses against total profits) to deduct losses incurred in the ring fence trade from ring fence profits of earlier post-commencement periods.

4 The second assumption is that (where appropriate) section 42 (ring fence trades: further extension of period for relief) applies in relation to every such claim under section 37.

5 This section is subject to section 324 (special rule for straddling periods).

6 This section has effect for the purposes of the post-commencement supplement provisions.