Corporation Tax Act 2010 section 357JHB

Restriction on deductions

Section 357JHB restricts the amount that can be deducted when a Northern Ireland loss carried forward is surrendered as group relief against profits that are not Northern Ireland profits, where the Northern Ireland corporation tax rate is lower than the main rate.

• Where a company claims group relief for carried-forward losses and the surrendered amount is a Northern Ireland loss, but the profits against which relief is claimed include non-Northern Ireland (mainstream) profits, a restriction may apply.
• The restriction applies if, at any time during the accounting period in which the relief is claimed, the Northern Ireland corporation tax rate is lower than the main rate.
• When the restriction applies, the deduction allowed against mainstream profits is not the full amount of the Northern Ireland loss but a reduced "restricted deduction" calculated in accordance with section 357JJ.
• This restriction applies whether the group relief claim relates to the whole of the surrendering company's surrenderable amounts or only to a part of those amounts, provided that the loss in question is a Northern Ireland loss.