Part 5 Group relief

Chapter 2 Surrender of company's losses etc for an accounting period

Restrictions on losses and other amounts that may be surrendered

107 Restriction on losses etc surrenderable by non-UK resident
(1) This section applies if the surrendering company is a non-UK resident company within the charge to corporation tax.
Words in s. 107(1) substituted (with effect in accordance with s. 81 of the amending Act) by Finance Act 2016 (c. 24), s. 76(10) (and also with effect in accordance with Finance (No. 2) Act 2017 (c. 32), s. 39(1)(2))
Words in s. 107(1) substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 30, 35 (with Sch. 5 para. 36)
(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 107(1A) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(a)
(2) ... The surrendering company may surrender a loss or other amount under this Chapter only so far as conditions A, B and C are met in relation to the loss or other amount.
Words in s. 107(2) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(b)
Words in s. 107(2) substituted (with effect in accordance with s. 30(6)-(8) of the amending Act) by Finance Act 2013 (c. 29), s. 30(3)
(3) Condition A is that the loss or other amount is attributable to activities of the surrendering company in respect of which it is within the charge to corporation tax for the surrender period.
(4) Condition B is that the loss or other amount is not attributable to activities of the surrendering company that are double taxation exempt for the surrender period (see section 186).
(5) Condition C is that—
(a) the loss or other amount does not correspond to, and is not represented in, an amount within subsection (6), and
(b) no amount brought into account in calculating the loss or other amount corresponds to, or is represented in, an amount within subsection (6).
(6) An amount is within this subsection if, for the purposes of non-UK tax chargeable under the law of a territory, the amount is (in any period) deductible from or otherwise allowable against non-UK profits of any person.
(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 107(6A) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(a)
(6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 107(6B) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(a)
(7) But an amount is not to be taken to be within subsection (6) ... by reason only that it is—
(a) an amount of profits brought into account for the purpose of being excluded from non-UK profits of the person, or
(b) an amount brought into account in calculating an amount of profits brought into account as mentioned in paragraph (a).
Words in s. 107(7) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(c)
(8) Subsection (9) applies for the purposes of subsection (6) if, in order to determine if an amount is deductible or otherwise allowable for the purposes of non-UK tax chargeable under the law of a territory, it is necessary under that law to know if the amount (or a corresponding amount) is deductible or otherwise allowable for tax purposes in the United Kingdom.
(9) The amount is to be treated as deductible or otherwise allowable for the purposes of the non-UK tax chargeable under the law of the territory concerned.
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 107(10) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(a)
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. 107(11) omitted (with effect in accordance with Sch. 4 para. 5 of the amending Act) by virtue of Finance Act 2022 (c. 3), s. 24(2)(a)
Pt. 5 applied (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 125 (with s. 147, Sch. 17)
Pt. 5 excluded (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 20(5)
Pt. 5 modified by 2009 c. 4, s. 1218ZDB(2) (as inserted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(a) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 1 (with Sch. 6 para. 21(3)))
Pt. 5 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Risk Transformation (Tax) Regulations 2017 (S.I. 2017/1271), regs. 1(1), 10, 11
Pt. 5 applied (with modifications) (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 47(4)
Pt. 5 excluded (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), s. 1(5)(e) (with ss. 15(1), 16(1))