322Stranded deficits in non-trading loan relationships: financing expense
(1)This section applies if, apart from this section, an amount (“the relevant amount”) is a financing expense amount of a company (“company A”) because of meeting condition A in section 313.
(2)The relevant amount is treated as not being a financing expense amount of company A, but only if an election is made for this purpose.
(3)Such an election may not be made unless each of conditions 1 to 4 is met.
(4)Condition 1 is that company A and the other party to the loan relationship (“company B”) are both members of the worldwide group.
(5)Condition 2 is that company B—
(a)is resident in the United Kingdom, or
(b)is not resident in the United Kingdom and is carrying on a trade in the United Kingdom through a permanent establishment in the United Kingdom.
(6)Condition 3 is that, under section 457 of CTA 2009, company B carries forward an amount of non-trading deficit and sets it off against non-trading profits of an accounting period that falls wholly or partly within the period of account of the worldwide group.
(7)Condition 4 is that the amount of non-trading deficit carried forward and set off is equal to, or greater than, the relevant amount.
(8)An election under this section may only be made—
(a)jointly by company A and company B, and
(b)within 36 months of the end of the period of account of the worldwide group to which the relevant amount relates.