Corporation Tax Act 2010 section 269CB

Restriction on deductions for non-trading deficits from loan relationships

Section 269CB restricts the amount of pre-April 2015 non-trading loan relationship deficits that a banking company can deduct when calculating its taxable total profits.

• Banking companies can only deduct pre-2015 carried-forward non-trading deficits from loan relationships up to a maximum of 25% of their total relevant non-trading profits for the accounting period
• The restriction does not apply where the company has no relevant non-trading profits (i.e. the starting figure in the calculation is nil or negative)
• A "pre-2015 carried-forward non-trading deficit" is a non-trading deficit from loan relationships arising in accounting periods ending before 1 April 2015, carried forward to be set against current non-trading profits
• Certain exemptions from this restriction exist for specific categories of losses, such as losses arising before the company began banking activity or losses covered by carried-forward loss allowances