Section 356NI — Corporation Tax Act 2010: Deductions allowances where company has contractor's ring fence profits

Deductions allowances where company has contractor's ring fence profits 356NI 1 This section applies if a company (“C”) has contractor's ring fence profits for an accounting period.

2 Subsections (3) to (6) set out how to determine, for the accounting period—

a C's deductions allowance for the purposes of Part 7ZA (restrictions on obtaining certain deductions),

and b C's contractor's ring fence profits deductions allowance.

3 Determine in accordance with Part 7ZA what C's deductions allowance for the period would be in the absence of this section (and call this “amount A”).

4 Determine C's contractor's ring fence profits deductions allowance for the period in accordance with subsection (5).

5 C's “contractor's ring fence profits deductions allowance” for an accounting period—

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

6 Subsection (7) applies if a relevant reversal credit is brought into account in calculating C's contractor's ring fence profits for the accounting period. In this subsection the reference to bringing into account a relevant reversal credit is to be interpreted in accordance with section 269ZY.

7 C's contractor's ring fence profits deductions allowance for the accounting period (as determined in accordance with subsection (5)) is to be treated for all purposes as increased by—

a the amount of the relevant reversal credit, or b if lower, the amount of the contractor's ring fence profits for the accounting period.

8 C's deductions allowance for the period for the purposes of Part 7ZA is to be taken to be an amount equal to amount A less the amount of C's ring fence profits deductions allowance for the period.