Section 357DB — Corporation Tax Act 2010: Method of allocation

Method of allocation 357DB 1 In this section “ method of allocation ” means the method of allocating, for the purposes of Step 2 in section 357DA(1), the amounts mentioned in that step.

2 A company that applies section 357DA for the purposes of determining the relevant IP profits of a trade of the company for an accounting period must use the same method of allocation in relation to the trade for that accounting period as it used in the last accounting period of the company for which it applied that section for the purposes of determining the relevant IP profits of the trade.

3 But subsection (2) does not apply if there is a change of circumstances relating to the trade which makes the use of that method of allocation in relation to the trade for the accounting period inappropriate.

4 In such a case, the company may—

a use a different method of allocation in relation to the trade for the accounting period (and subsection (2) applies accordingly for subsequent accounting periods), or b elect not to apply section 357DA for the purposes of determining the relevant IP profits of the trade for the accounting period.

5 Subsection (4)(b) does not prevent the company making a fresh streaming election in relation to the trade for any subsequent accounting period.