82Carry forward of non-trading deficit on loan relationships
(1)In section 83 of the [1996 c. 8.] Finance Act 1996 (non-trading deficit on loan relationships), for subsections (3) and (4) substitute—
“(3)So much of the deficit for the deficit period as is not the subject of a claim under subsection (2) above shall be carried forward and treated as a deficit for the next accounting period.
(4)An amount carried forward to an accounting period under subsection (3) above—
(a)may be the subject of a claim under paragraph (d) of subsection (2) above, but not under any other paragraph of that subsection, and
(b)shall be disregarded for the purposes of any claim under that subsection relating to a deficit arising in that period.”.
(2)Section 797 (limits on credit: corporation tax) and section 797A (foreign tax on interest brought into account as a non-trading credit) of the Taxes Act 1988 are amended as follows—
(a)in section 797(3B)(b), omit “or in accordance with subsection (3) of that section”;
(b)in section 797A(5), at the end of paragraph (a) insert the word “and” and omit paragraph (c) and the word “and” preceding it;
(c)at the end of section 797A(5), insert—
“An amount carried forward to the applicable accounting period under section 83(3) of that Act shall not be treated as a non-trading deficit for that period for the purposes of paragraphs (a) and (b).”;
(d)in section 797A(6), for “specified in subsection (5)(c) above” substitute “carried forward to the applicable accounting period in pursuance of a claim under section 83(2)(d) of that Act”;
(e)at the end of section 797A(7) insert—
“An amount carried forward to the applicable accounting period under section 83(3) of the [1996 c. 8.] Finance Act 1996 shall be disregarded for the purposes of paragraphs (a) and (b).”.
(3)The following amendments of Schedule 28A to the Taxes Act 1988 (change in ownership of investment company: deductions) are consequential on the amendment in subsection (1) above—
(a)in paragraph 6(da), after “period” insert “(other than one within sub-paragraph (dc) below)”;
(b)in paragraph 6(db), omit “(dc) or”;
(c)in paragraph 6(dc), for “debit given for that accounting period by” substitute “deficit carried forward to that accounting period under”;
(d)in paragraph 7(1)(b), for “debit” substitute “deficit”;
(e)in paragraph 11(2), omit paragraph (a);
(f)in paragraph 13(1)(ea), after “period” insert “(other than one within paragraph (ec) below)”;
(g)in paragraph 13(1)(eb), omit “(ec) or”;
(h)in paragraph 13(1)(ec), for “debit given for that accounting period by” substitute “deficit carried forward to that accounting period under”;
(i)in paragraph 16(1)(b), for “debit” substitute “deficit”.
(4)The amendments made by this section shall be deemed always to have had effect.