Corporation Tax Act 2010 section 356JL

Use of allowance attributable to unlicensed area

Section 356JL allows a company that disposes of its share in a licensed area within a cluster area to elect to reassign cluster area allowance that was attributable to an unlicensed area to a licensed area or sub-area within the same cluster.

• When a company disposes of all or part of its equity share in a licensed area within a cluster area, and it has generated cluster area allowance attributable to an unlicensed area in that cluster, it may elect to reassign that allowance to the disposal area or another licensed area in which it holds a licence.
• The total allowance available for reassignment includes all cluster area allowance generated by the company on or before the day of disposal, including any amounts treated as generated under section 356JKB(1).
• The election must be made within 60 days of the disposal, must specify the amount transferred, the unlicensed area it was attributable to, and the licensed area it is being assigned to, and is irrevocable once made.
• Once assigned, the allowance is treated as having always been attributable to the chosen licensed area from the beginning of the disposal day, and as never having been attributable to the unlicensed area.