Finance (No. 2) Act 2017

(124A) (1) This section applies if— (a) an insurance company carrying on basic life assurance and general annuity business makes a BLAGAB trade loss for an accounting period beginning on or after 1 April 2017 (“the loss-making period”), (b) relief under— - section 37 of CTA 2010 (as applied by section 123), or - Part 5 of CTA 2010 (group relief) (as applied by section 125), is not given for an amount of the loss (“the unrelieved amount”), and (c) the company continues to carry on basic life assurance and general annuity business in the next accounting period (“the later period”). (2) The unrelieved amount is carried forward to the later period. (3) Relief for the unrelieved amount is given to the company in the later period if the company has a BLAGAB trade profit for the later period. (4) The relief is given as set out in subsection (5). (5) For the purposes of— (a) section 93 (minimum profits charge), and (b) section 104 (policyholders' rate of tax), the BLAGAB trade profit of the later period is reduced by the unrelieved amount (but see also section 124D). (6) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts. (124B) (1) This section applies if— (a) an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period of the company (“the later period”) under section 124A(2) or 124C(3), and (b) any of that amount (“the unrelieved amount”) is not deducted under section 124A(5) or 124C(6) (as the case may be) from the company's BLAGAB trade profit (if any) of the later period. (2) The company may make a claim for relief to be given for the unrelieved amount under this section. (3) If the company makes a claim, the relief is given by deducting the unrelieved amount, or any part of it specified in the claim, from the company's total profits of the later period. (4) But (if the company is a Solvency 2 insurance company)— (a) the company may not make a claim under this section if the unrelieved amount is wholly a shock loss, and (b) the company may not make a claim specifying a part of the unrelieved amount if that part is (to any extent) a shock loss. (5) For the purposes of subsection (4) assume that in any use by the company of the BLAGAB trade loss for relief under— (a) section 37 of CTA 2010 (as applied by section 123), (b) Part 5 of CTA 2010 (as applied by section 125), or (c) section 124A(5) or 124C(6), any part of it that is a shock loss is used before any part of it that is not a shock loss. (6) A claim under this section must be made— (a) within the period of two years after the end of the later period, or (b) within such further period as an officer of Revenue and Customs may allow. (7) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts. (8) In this section— - “Solvency 2 insurance company” means an insurance undertaking, a reinsurance undertaking or a third-country insurance undertaking; - “insurance undertaking” has the meaning given in Article 13(1) of the Solvency 2 Directive; - “reinsurance undertaking” has the meaning given in Article 13(4) of the Solvency 2 Directive; - “Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II); - “shock loss” has the meaning given by section 269ZK of CTA 2010; - “third-country insurance undertaking” means an undertaking that has received authorisation under Article 162 of the Solvency 2 Directive from the Prudential Regulation Authority or the Financial Conduct Authority. (124C) (1) This section applies if— (a) an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period (“the later period”) of the company under section 124A(2) or subsection (3) of this section, (b) any of that amount is unrelieved in the later period, and (c) the company continues to carry on basic life assurance and general annuity business in the accounting period (“the further period”) after the later period. (2) An amount carried forward as mentioned in subsection (1)(a) is “unrelieved in the later period” so far as it is not— (a) deducted under section 124A(5) or subsection (6) of this section from the company's BLAGAB trade profit (if any) of the later period, (b) deducted from the company's total profits of the later period on a claim under 124B, or (c) surrendered by way of group relief for carried-forward losses under Part 5A of CTA 2010. (3) So much of the amount mentioned in subsection (1)(a) as is unrelieved in the later period is carried forward to the further period. (4) Relief for the amount carried forward under subsection (3) (“the remaining carried forward amount”) is given to the company in the further period if the company has a BLAGAB trade profit for that period. (5) The relief is given as set out in subsection (6). (6) For the purposes of— (a) section 93 (minimum profits charge), and (b) section 104 (policyholders' rate of tax), the BLAGAB trade profit of the further period is reduced by the remaining carried forward amount (but see also section 124D). (7) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts. (124D) (1) The sum of any deductions made by a company for an accounting period under sections 124(5), 124A(5) and 124C(6) may not exceed the relevant maximum. But this is subject to subsection (6). (2) In this section the “relevant maximum” means the sum of— (a) 50% of the company's relevant BLAGAB trade profits for the accounting period, and (b) the company's BLAGAB trade profits deductions allowance for the accounting period. (3) A company's “relevant BLAGAB trade profits” for an accounting period are— (a) the company's BLAGAB trade profit for the accounting period, less (b) the company's BLAGAB trade profits deductions allowance for the accounting period. But if the allowance mentioned in paragraph (b) exceeds the profit mentioned in paragraph (a), the company's “relevant BLAGAB trade profits” for the accounting period are nil. (4) A company's “BLAGAB trade profits deductions allowance” for an accounting period— (a) is so much of the company's deductions allowance for the period as is specified in the company's tax return as its BLAGAB trade profits deductions allowance for the period, and (b) accordingly, is nil if no amount of the company's deductions allowance for the period is so specified. (5) An amount specified under subsection (4)(a) as a company's BLAGAB trade profits deductions allowance for an accounting period may not exceed the difference between— (a) the amount of the company's deductions allowance for the period, and (b) the total of any amounts specified for the period under sections 269ZB(7)(a) of CTA 2010 (trading profits deduction allowance) and 269ZC(5)(a) of CTA 2010 (non-trading profits deduction allowance). (6) Subsection (1) does not apply to a company for an accounting period if the company's BLAGAB trade profit for the accounting period is not greater than nil. (7) Section 269ZB(9) of CTA 2010 gives the meaning of “deductions allowance” in relation to a company and an accounting period. (124E) (1) Subsection (2) applies where the company making a deduction under section 124A(5) or 124C(6) is a Solvency 2 insurance company. (2) The deduction is to be ignored for the purposes of section 124D(1) and section 269ZD(2)(b)(iii) of CTA 2010 so far as it is a deduction of a shock loss. (3) Where, by virtue of subsection (2), any deductions made by a Solvency 2 insurance company for an accounting period would be ignored for the purposes of section 124D(1), the references in section 124D(3)(a) and (6) to the company's BLAGAB trade profit have effect as references to that profit as reduced by those deductions. (4) In this section “Solvency 2 insurance company” and “shock loss” have the same meaning as in section 124B.

PART 5 — Carrying forward trade losses in certain creative industries

Losses of film trade

27

Chapter 4 of Part 15 of CTA 2009 (losses of separate film trade) is amended as follows.

28

• (1) Section 1209 (restriction on use of losses while film in production) is amended as follows.

• (2) In subsection (2)—

• (a) after “45” insert “ or 45B ”, and

• (b) for “set against” substitute “ deducted from ”.

• (3) After subsection (2) insert—

(3) If the loss is carried forward under section 45 or 45B of CTA 2010 and deducted from profits of the separate film trade in a subsequent period, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

29

• (1) Section 1210 (use of losses in later periods) is amended as follows.

• (2) In subsection (2) after “45” insert “ or 45B ”.

• (3) In subsection (3) for “loss relief” substitute “ section 37 and Part 5 of CTA 2010 ”.

• (4) In subsection (4) for “Subsection (5) applies” substitute “ Subsections (5) and (5A) apply ”.

• (5) In subsection (5) after paragraph (a) insert—

(ab) carried forward under section 45A of that Act to be deducted from the total profits of a later period,

• (6) After subsection (5) insert—

(5A) A deduction under section 45 or 45B of CTA 2010 which is made in respect of so much of the loss as is attributable to film tax relief is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

30

• (1) Section 1211 (terminal losses) is amended as follows.

• (2) In subsection (1)(c)—

• (a) after “45” insert “ , 45A or 45B ”, and

• (b) omit “trade X in”.

• (3) In subsection (3) for the words after “treated” to the end substitute

— (a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on, and (b) in a case where the loss could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Y which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (4) In subsection (6) for the words after “treated” to the end substitute

— (a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on, and (b) in a case where the amount could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Z which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (5) After subsection (7) insert—

(7A) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

Losses of television programme trade

31

Chapter 4 of Part 15A of CTA 2009 (losses of separate television programme trade) is amended as follows.

32

• (1) Section 1216DA (restriction on use of losses while programme in production) is amended as follows.

• (2) In subsection (2)—

• (a) after “45” insert “ or 45B ”, and

• (b) for “set against” substitute “ deducted from ”.

• (3) After subsection (2) insert—

(3) If the loss is carried forward under section 45 or 45B of CTA 2010 and deducted from profits of the separate programme trade in a subsequent period, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

33

• (1) Section 1216DB (use of losses in later periods) is amended as follows.

• (2) In subsection (2) after “45” insert “ or 45B ”.

• (3) In subsection (3) for “loss relief” substitute “ section 37 and Part 5 of CTA 2010 ”.

• (4) In subsection (4) for “Subsection (5) applies” substitute “ Subsections (5) and (5A) apply ”.

• (5) In subsection (5) after paragraph (a) insert—

(ab) carried forward under section 45A of that Act to be deducted from the total profits of a later period,

• (6) After subsection (5) insert—

(5A) A deduction under section 45 or 45B of CTA 2010 which is made in respect of so much of the loss as is attributable to television tax relief is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

34

• (1) Section 1216DC (terminal losses) is amended as follows.

• (2) In subsection (1)(c)—

• (a) after “45” insert “ , 45A or 45B ”, and

• (b) omit “trade X in”.

• (3) In subsection (3) for the words after “treated” to the end substitute

— (a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on, and (b) in a case where the loss could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Y which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (4) In subsection (6) for the words after “treated” to the end substitute

— (a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on, and (b) in a case where the amount could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Z which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (5) After subsection (7) insert—

(7A) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

Losses of video game trade

35

Chapter 4 of Part 15B of CTA 2009 (losses of separate video game trade) is amended as follows.

36

• (1) Section 1217DA (restriction on use of losses while video game in development) is amended as follows.

• (2) In subsection (2)—

• (a) after “45” insert “ or 45B ”, and

• (b) for “set against” substitute “ deducted from ”.

• (3) After subsection (2) insert—

(3) If the loss is carried forward under section 45 or 45B of CTA 2010 and deducted from profits of the separate video game trade in a subsequent period, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

37

• (1) Section 1217DB (use of losses in later periods) is amended as follows.

• (2) In subsection (2) after “45” insert “ or 45B ”.

• (3) In subsection (3) for “loss relief” substitute “ section 37 and Part 5 of CTA 2010 ”.

• (4) In subsection (4) for “Subsection (5) applies” substitute “ Subsections (5) and (5A) apply ”.

• (5) In subsection (5) after paragraph (a) insert—

(ab) carried forward under section 45A of that Act to be deducted from the total profits of a later period,

• (6) After subsection (5) insert—

(5A) A deduction under section 45 or 45B of CTA 2010 which is made in respect of so much of the loss as is attributable to video games tax relief is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

38

• (1) Section 1217DC (terminal losses) is amended as follows.

• (2) In subsection (1)(c)—

• (a) after “45” insert “ , 45A or 45B ”, and

• (b) omit “trade X in”.

• (3) In subsection (3) for the words after “treated” to the end substitute

— (a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on, and (b) in a case where the loss could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Y which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (4) In subsection (6) for the words after “treated” to the end substitute

— (a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on, and (b) in a case where the amount could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Z which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.

• (5) After subsection (7) insert—

(7A) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

Losses of theatrical trade

39

Part 15C of CTA 2009 (theatrical productions) is amended as follows.

40

• (1) Section 1217MA (restriction on use of losses before completion period) is amended as follows.

• (2) In subsection (1) for “Subsection (2)” substitute “ This section ”.

• (3) In subsection (2)—

• (a) after “45” insert “ or 45B ”, and

• (b) for “set against” substitute “ deducted from ”.

• (4) After subsection (2) insert—

(3) If the loss is carried forward under section 45 or 45B of CTA 2010 and deducted from profits of the separate theatrical trade in a subsequent period, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

41

• (1) Section 1217MB (use of losses in the completion period) is amended as follows.

• (2) In subsection (1) after “45” insert “ or 45B ”.

• (3) In subsection (2) for “loss relief” substitute “ section 37 and Part 5 of CTA 2010 ”.

42

• (1) Section 1217MC (terminal losses) is amended as follows.

• (2) In subsection (1)(b) after “45” insert “ or 45B ”.

• (3) In subsection (3) for the words after “treated” to the end substitute

— (a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade 1 not ceased, as if it were a loss carried forward under that section to be set against the profits of trade 2 of the first accounting period beginning after the cessation and so on, and (b) in a case where the loss could have been carried forward under section 45B of CTA 2010 had trade 1 not ceased, as if it were a loss made in trade 2 which has been carried forward under that section to the first accounting period beginning after the cessation.

• (4) In subsection (6) for the words after “treated” to the end substitute

— (a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade 1 not ceased, as if it were a loss carried forward by company B under that section to be set against the profits of company B's trade of the first accounting period beginning after the cessation and so on, and (b) in a case where the amount could have been carried forward under section 45B of CTA 2010 had trade 1 not ceased, as if it were a loss made in company B's trade which has been carried forward under that section to the first accounting period beginning after the cessation.

• (5) After subsection (8) insert—

(9) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

Losses of orchestral trade

43

Chapter 4 of Part 15D of CTA 2009 (losses of separate orchestral trade) is amended as follows.

44

• (1) Section 1217SA (restriction on use of losses before completion period) is amended as follows.

• (2) In subsection (1) for “Subsection (2)” substitute “ This section ”.

• (3) In subsection (2)—

• (a) after “45” insert “ or 45B ”, and

• (b) for “set against” substitute “ deducted from ”.

• (4) After subsection (2) insert—

(3) If the loss is carried forward under section 45 or 45B of CTA 2010 and deducted from profits of the separate orchestral trade in a subsequent period, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

45

• (1) Section 1217SB (use of losses in the completion period) is amended as follows.

• (2) In subsection (1) after “45” insert “ or 45B ”.

• (3) In subsection (2) for “loss relief” substitute “ section 37 and Part 5 of CTA 2010 ”.

46

• (1) Section 1217SC (terminal losses) is amended as follows.

• (2) In subsection (1)(b) after “45” insert “ or 45B ”.

• (3) In subsection (3) for the words after “treated” to the end substitute

— (a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade 1 not ceased, as if it were a loss carried forward under that section to be set against the profits of trade 2 of the first accounting period beginning after the cessation and so on, and (b) in a case where the loss could have been carried forward under section 45B of CTA 2010 had trade 1 not ceased, as if it were a loss made in trade 2 which has been carried forward under that section to the first accounting period beginning after the cessation.

• (4) In subsection (6) for the words after “treated” to the end substitute

— (a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade 1 not ceased, as if it were a loss carried forward by company B under that section to be set against the profits of company B's trade of the first accounting period beginning after the cessation and so on, and (b) in a case where the amount could have been carried forward under section 45B of CTA 2010 had trade 1 not ceased, as if it were a loss made in company B's trade which has been carried forward under that section to the first accounting period beginning after the cessation.

• (5) After subsection (8) insert—

(9) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).

PART 6 — Oil activities

47

Part 8 of CTA 2010 (oil activities) is amended as follows.

48

After section 303 insert—

(303A) (1) This section has effect for the purposes of sections 303B to 303D. (2) A loss made by a company in a ring fence trade is a “non-decommissioning loss” so far as it is not attributable to expenditure which is relevant expenditure in relation to a decommissioning relief agreement. (3) Where a company makes a loss for an accounting period in a ring fence trade, the amount (if any) of that loss that is “attributable to” expenditure which is relevant expenditure in relation to a decommissioning relief agreement is equal to— (a) the total amount of such expenditure brought into account in calculating that loss, or (b) if lower, the amount of the loss. (4) Expenditure is “relevant expenditure” in relation to a decommissioning relief agreement if it is decommissioning expenditure (as defined in section 81 of FA 2013) to which the provision of the agreement described in section 80(2)(b) of that Act relates. In this subsection the reference to section 81 of FA 2013 is to that section as it has effect when the agreement in question is made. (5) In this section “decommissioning relief agreement” has the meaning given by section 80 of FA 2013. (303B) (1) This section applies if— (a) in an accounting period beginning on or after 1 April 2017 (“the loss-making period”) a company makes a non-decommissioning loss in a ring fence trade, (b) relief under— - section 37 or 42, or - Part 5 (group relief), is not given for an amount of the loss (“the unrelieved amount”), and (c) the company continues to carry on the ring fence trade in the next accounting period (“the later period”). (2) The unrelieved amount is carried forward to the later period. (3) Relief for the unrelieved amount is given to the company in the later period if the company makes a profit in the trade for the later period. (4) The relief is given by reducing the profits of the trade in the later period by the unrelieved amount. (5) Relief under this section is subject to restriction or modification in accordance with the provisions of the Corporation Tax Acts. (303C) (1) This section applies if— (a) an amount of a non-decommissioning loss made in a ring fence trade is carried forward to an accounting period of a company (“the later period”) under section 303B(2) or 303D(3), and (b) any of that amount (“the unrelieved amount”) is not deducted under section 303B(4) or 303D(5) (as the case may be) from the company's profits of the trade (if any) of the later period. (2) The company may make a claim for relief to be given for the unrelieved amount under this section (but see subsection (4)). (3) If the company makes a claim, the relief is given by deducting the unrelieved amount, or any part of it specified in the claim, from the company's total profits of the later period. (4) The company may not make a claim if— (a) the ring fence trade became small or negligible in the loss-making period or any intervening period, (b) relief under section 37 was unavailable for the non-decommissioning loss by reason of section 37(5) or 44, or (c) relief under section 37 would be unavailable by reason of section 44 for a loss (assuming there was one) made in the ring fence trade in the later period or any intervening period. (5) In subsection (4)— - “intervening period” means an accounting period of the company which begins after the loss-making period and before the later period, and - “the loss-making period” means the accounting period of the company in which the non-decommissioning loss was made. (6) A claim under this section must be made— (a) within the period of two years after the end of the later period, or (b) within such further period as an officer of Revenue and Customs may allow. (7) Relief under this section is subject to restriction or modification in accordance with the provisions of the Corporation Tax Acts. (303D) (1) This section applies if— (a) an amount of a loss made in a ring fence trade is carried forward to an accounting period (“the later period”) of a company under section 303B(2) or subsection (3) of this section, (b) any of that amount is unrelieved in the later period, and (c) the company continues to carry on the ring fence trade in the accounting period (“the further period”) after the later period. (2) An amount carried forward as mentioned in subsection (1)(a) is “unrelieved in the later period” so far as it is not— (a) deducted under section 303B(4) or subsection (5) of this section from the company's profit (if any) of the later period, (b) deducted from the company's total profits of the later period on a claim under section 303C, or (c) surrendered by way of group relief for carried-forward losses under Part 5A of CTA 2010. (3) So much of the amount mentioned in subsection (1)(a) as is unrelieved in the later period is carried forward to the further period. (4) Relief for the amount carried forward under subsection (3) (“the remaining carried forward amount”) is given to the company in the further period if the company has a profit in the trade for that period. (5) The relief is given by reducing the profits of the trade of the further period by the remaining carried forward amount. (6) Relief under this section is subject to restriction or modification in accordance with the provisions of the Corporation Tax Acts.

49

• (1) Section 304 (losses) is amended as follows.

• (2) After subsection (1) insert—

(1A) Relief in respect of a loss incurred by a company may not be given against that company's ring fence profits under any provision listed in subsection (1B). (1B) The provisions are— (a) section 753 of CTA 2009 (non-trading losses on intangible fixed assets); (b) section 45A (carry forward of trade loss against total profits); (c) section 62(3) (relief for losses made in UK property business).

• (3) In subsection (5), after “45” insert “ 45B, 303B(4) or 303D(5) ”.

• (4) After subsection (6) insert—

(7) A deduction in respect of a loss made in a ring fence trade is to be ignored for the purposes of section 269ZB (restriction on deductions from trading profits) if the deduction is under— (a) section 45 (carry forward of pre-1 April 2017 trade loss against subsequent profits), or (b) section 45B (carry forward of post-1 April 2017 trade loss against total profits).

50

• (1) Section 305 (group relief) is amended as follows.

• (2) In the heading, at the end insert “ and group relief for carried-forward losses ”.

• (3) After subsection (1) insert—

(1A) On a claim under Chapter 3 of Part 5A, group relief for carried-forward losses may not be allowed against the claimant company's ring fence profits.

• (4) For subsection (4) substitute—

(4) In this section— - “claimant company” is to be read in accordance with Part 5 (see section 188) or Part 5A (see sections 188CB(2) and 188CC(2)), as the case requires; - “surrendering company” is to be read in accordance with Part 5 (see section 188).

51

In section 307 (overview of Chapter 5 of Part 8: ring fence expenditure supplement) in subsection (6) for paragraph (c) substitute—

(c) relief given under sections 45, 45B, 303B, 303C and 303D for ring fence losses carried forward from earlier periods,

.

52

• (1) Section 321 (supplement in respect of a post-commencement period) is amended as follows.

• (2) In subsection (2) (treatment of supplement as loss etc)—

• (a) in the words before paragraph (a) after “period” insert “ beginning before 1 April 2017 ”, and

• (b) in paragraph (b) after “forward of” insert “ pre-1 April 2017 ”.

• (3) After subsection (2) insert—

(2A) Any post-commencement supplement allowed on a claim in respect of a post-commencement period beginning on or after 1 April 2017 is to be treated for the purposes of the Corporation Tax Acts (other than the post-commencement supplement provisions or Part 4 of Schedule 19B to ICTA) as if it were a loss— (a) which is incurred in carrying on the ring fence trade in that period, and (b) which falls in whole to be used under section 45B (carry forward of post-1 April 2017 trade loss against subsequent trade profits) to reduce trading income from the ring fence trade in succeeding accounting periods.

53

• (1) Section 323 (meaning of “ring fence losses”) is amended as follows.

• (2) In subsection (1)—

• (a) for paragraph (b) substitute—

(b) some or all of the loss falls to be carried forward to the following accounting period under section 45, 45B or 303B (carry forward of trade losses against subsequent profits)

, and

• (b) in the words after paragraph (b) for “used” substitute “ carried forward ”.

• (3) In subsection (2) for “used” substitute “ carried forward ”.

54

For section 327 substitute—

(327) (1) Reductions are to be made in accordance with this section in a post-commencement period if the relevant amount for the period (see subsection (4)) is not nil. (2) If the company has a non-qualifying pool, the amount in the non-qualifying pool is to be reduced (but not below nil) by setting against it a sum equal to the relevant amount for the post-commencement period. (3) If— (a) any of that sum remains after being so set against the amount in the non-qualifying pool, or (b) the company does not have a non-qualifying pool, the amount in the ring fence pool is to be reduced (but not below nil) by setting against it so much of that sum as so remains or (as the case may be) a sum equal to the relevant amount for the post-commencement period. (4) For the purposes of this section, the relevant amount for a post-commencement period is the sum of— (a) the amount of any relief given in respect of ring fence losses in the post-commencement period under sections 45, 45B, 303B, 303C and 303D, and (b) the amount of any relief prevented from being given in respect of ring fence losses in the post-commencement period by claims made under sections 45(4A) and 45B(5).

55

In section 328A (adjustment of pool to remove pre-2013 losses after the initial 6 periods) in subsection (11)—

• (a) in paragraph (a) for the words from the beginning to “a loss” substitute “ no account is to be taken of a loss in determining under section 327(4) the relevant amount for a post-commencement period ”, and

• (b) in paragraph (b) for the words from “ring fence losses” to the end substitute “ any such profits are reduced by the use under section 45, 45B, 303B, 303C and 303D of ring fence losses that are not represented by the reduction ”.

PART 7 — Oil contractors

56

Part 8ZA of CTA 2010 (oil contractors) is amended as follows.

57

• (1) Section 356NE (losses) is amended as follows.

• (2) The existing text becomes subsection (1) of that section.

• (3) In subsection (1)—

• (a) after “the contractor” insert “ (or an amount of such a loss) ”;

• (b) after “profits)” insert “ or section 45A (carry forward of post-1 April 2017 trade loss against total profits) ”;

• (c) after “the loss” insert “ (or amount) ”.

• (4) After subsection (1) insert—

(2) Relief in respect of a loss incurred by the contractor may not be given against the contractor's ring fence profits under any provision listed in subsection (3). (3) The provisions are— (a) section 753 of CTA 2009 (non-trading losses on intangible fixed assets); (b) section 62(3) (relief for losses made in UK property business); (c) section 303C(3) (excess carried forward non-decommissioning losses of ring fence trade: relief against total profits).

58

• (1) Section 356NF (group relief) is amended as follows.

• (2) In the heading, at the end insert “ and group relief for carried-forward losses ”.

• (3) After subsection (3) insert—

(3A) On a claim under Chapter 3 of Part 5A, group relief for carried-forward losses may not be allowed against the claimant company's contractor's ring fence profits, except so far as the claim relates to losses incurred by the surrendering company that arose from oil contractor activities.

• (4) For subsection (4) substitute—

(4) In this section— - “claimant company” is to be read in accordance with Part 5 (see section 188) or Part 5A (see sections 188CB(2) and 188CC(2)), as the case requires; - “surrendering company” is to be read in accordance with Part 5 (see section 188) or Part 5A (see section 188BB(7)), as the case requires.

59

After section 356NG insert—

(356NH) (1) For the purpose of determining the contractor's taxable total profits for an accounting period, the sum of any relevant deductions from total profits made by the contractor for the accounting period may not exceed the relevant Part 8ZA maximum. (2) In this section “relevant deduction from total profits” means— (a) any deduction of a loss (or an amount of a loss) under section 45(4)(b) (carry forward of pre-1 April 2017 loss against subsequent profits), so far as the loss arises from oil contractor activities, (b) any deduction of a loss (or an amount of a loss) under section 45A (carry forward of post-1 April 2017 trade loss against total profits), so far as the amount is set against the contractor's ring fence profits, and (c) any deduction of a loss or other amount under Part 5A (group relief for carried-forward losses), so far as the amount in question is set against the contractor's ring fence profits. (3) In this section “the relevant Part 8ZA maximum” means the sum of— (a) 50% of the contractor's ring fence profits for the accounting period, and (b) the amount of the contractor's ring fence profits deductions allowance for the period. (356NI) (1) This section applies if a company (“C”) has contractor's ring fence profits for an accounting period. (2) Subsections (3) to (6) set out how to determine, for the accounting period— (a) C's deductions allowance for the purposes of Part 7ZA (restrictions on obtaining certain deductions), and (b) C's contractor's ring fence profits deductions allowance. (3) Determine in accordance with Part 7ZA what C's deductions allowance for the period would be in the absence of this section (and call this “amount A”). (4) Determine C's contractor's ring fence profits deductions allowance for the period in accordance with subsection (5). (5) C's “contractor's ring fence profits deductions allowance” for an accounting period— (a) is so much of amount A as is specified in C's company tax return as its contractor's ring fence profits deductions allowance for the period, and (b) accordingly, is nil if no amount is so specified. (6) Subsection (7) applies if a relevant reversal credit is brought into account in calculating C's contractor's ring fence profits for the accounting period. In this subsection the reference to bringing into account a relevant reversal credit is to be interpreted in accordance with section 269ZY. (7) C's contractor's ring fence profits deductions allowance for the accounting period (as determined in accordance with subsection (5)) is to be treated for all purposes as increased by— (a) the amount of the relevant reversal credit, or (b) if lower, the amount of the contractor's ring fence profits for the accounting period. (8) C's deductions allowance for the period for the purposes of Part 7ZA is to be taken to be an amount equal to amount A less the amount of C's ring fence profits deductions allowance for the period. (356NJ) (1) The following deductions are to be treated as not being relevant deductions for the purposes of section 269ZD (restrictions on deductions from total profits)— (a) the deduction of a loss (or an amount of a loss) under section 45A (carry forward of post- 1 April 2017 trade loss against total profits), so far as the amount is set against the company's contractor's ring fence profits for the accounting period; (b) the deduction under Part 5A (group relief for carried-forward losses) of a loss or other amount, so far as the amount is set against the company's contractor's ring fence profits for the accounting period. (2) A deduction under section 45(4)(b) (carry forward of pre-1 April 2017 trade loss against subsequent profits) of a loss arising from oil contractor activities is to be ignored for the purposes of section 269ZB of CTA 2010 (restriction on deductions from trading profits).

PART 8 — Transferred trades

61

Chapter 1 of Part 22 of CTA 2010 (transfers of trade without a change of ownership) is amended as follows.

62

In section 940A (overview of Chapter) in subsection (4) for “944” substitute “ 943A ”.

63

Before section 944 (but after the italic heading preceding that section) insert—

(943A) If this Chapter applies to a transfer of a trade, section 39 (terminal losses: extension of periods for which relief may be given) does not apply in relation to a claim under section 37 by the predecessor for relief for a loss made in the transferred trade.

64

• (1) Section 944 (modified application of Chapter 2 of Part 4) is amended as follows.

• (2) In the heading for “Chapter 2 of Part 4” substitute “ section 45 ”.

• (3) Omit subsections (1) and (2).

• (4) In subsection (3)—

• (a) for “Relief” substitute “ If this Chapter applies to a transfer of a trade, relief ”, and

• (b) after “carry forward of” insert “ pre-1 April 2017 ”.

• (5) In subsection (4) after paragraph (a) insert—

(ab) any claim made by the predecessor under section 45F in reliance on subsection (2) of section 944C,

.

65

After section 944 insert—

(944A) (1) Subsection (2) applies if— (a) this Chapter applies to a transfer of a trade, (b) the transferred trade is not a ring fence trade, (c) the predecessor made a loss in the transferred trade in the accounting period in which it ceased to carry it on, (d) that accounting period began on or after 1 April 2017, (e) relief for an amount of that loss is not given under section 37 or Part 5, (f) relief under section 37 was not unavailable for that loss by reason of a provision mentioned in section 45A(3)(b)(i) or (ii), and (g) relief under section 37 would not be unavailable by reason of section 44 for a loss (assuming there was one) made by the successor in the transferred trade in the accounting period in which the successor begins to carry on the transferred trade (“the successor's start-up accounting period”). (2) Subsections (4) to (8) of section 45A (carry-forward of post-1 April 2017 trade loss against total profits) apply as if— (a) references to the unrelieved amount were to the amount referred to in subsection (1)(e), (b) references to the later period were to the successor's start-up accounting period, and (c) references to the company were to the successor. (3) Subsection (4) applies if— (a) this Chapter applies to a transfer of a trade, (b) an amount of a loss made in the transferred trade was carried forward under section 45A(4) to the accounting period of the predecessor in which the predecessor ceased to carry on the trade, (c) any of that amount was not deducted from the predecessor's total profits on a claim under section 45A(5) or surrendered by the predecessor by way of group relief for carried-forward losses under Part 5A, and (d) relief under section 37 would not be unavailable by reason of section 44 for a loss (assuming there was one) made by the successor in the transferred trade in the accounting period in which the successor begins to carry on the transferred trade (“the successor's start-up accounting period”). (4) Subsections (4) to (8) of section 45A apply as if— (a) references to the unrelieved amount were to so much of the amount referred to in subsection (3)(b) as was not deducted or surrendered as mentioned in subsection (3)(c), (b) references to the later period were to the successor's start-up accounting period, and (c) references to the company were to the successor. (5) In this section “ring fence trade” has the same meaning as in Part 8 (see section 277). (944B) (1) Subsection (2) applies if— (a) this Chapter applies to a transfer of a trade, (b) the predecessor made a loss in the transferred trade in the accounting period in which it ceased to carry it on, (c) that accounting period began on or after 1 April 2017, (d) relief under section 37 or 42 or Part 5 is not given for an amount of the loss, and (e) it is the case that— (i) relief under section 37 was unavailable for the loss by reason of any provision mentioned in section 45A(3)(b)(i) or (ii), (ii) relief under section 37 would be unavailable by reason of section 44 for a loss (assuming there was one) made by the successor in the transferred trade in the accounting period in which the successor begins to carry on the transferred trade (“the successor's start-up accounting period”), or (iii) the transferred trade is a ring fence trade. (2) Subsections (2) to (8) of section 45B (carry forward of post-1 April 2017 trade loss against trade profits) apply as if— (a) references to the unrelieved amount were to the amount mentioned in subsection (1)(d), (b) references to the later period were to the successor's start-up accounting period, (c) references to the company were to the successor, and (d) references to the trade were to the transferred trade. (3) Subsection (4) applies if— (a) this Chapter applies to a transfer of a trade, (b) an amount of a loss made in the transferred trade was carried forward under section 45B(2) to the accounting period in which the predecessor ceased to carry on the trade, and (c) any of that amount is not used under section 45B(4) to reduce profits of the transferred trade of the accounting period in which the predecessor ceases to carry on the trade. (4) Subsections (2) to (8) of section 45B apply as if— (a) references to the unrelieved amount were to so much of the amount referred to in subsection (3)(b) as is not used as mentioned in subsection (3)(c), (b) references to the later period were to the accounting period of the successor in which the successor begins to carry on the transferred trade, (c) references to the company were to the successor, and (d) references to the trade were to the transferred trade. (944C) (1) If this Chapter applies to a transfer of a trade, the predecessor may not make a claim under section 45F for relief to be given for an amount of a loss made in the transferred trade. (2) But subsection (1) does not apply if— (a) the trade is transferred before 13 July 2017, and (b) the amount of the loss is carried forward to the accounting period in which the predecessor ceases to carry on the trade under section 45 (carry forward of pre-1 April 2017 trade losses). (3) Subsection (4) applies if— (a) this Chapter applies to a transfer of a trade, (b) an amount of a loss made by the predecessor in the transferred trade is carried forward under section 45, 45A or 45B to the accounting period of the successor in which the successor ceases to carry on the transferred trade, and (c) relief in that accounting period is not given to the successor under section 45, 45A or (as the case may be) 45B for that amount or for any part of it. (4) Section 45F has effect as if the loss was made by the successor in the transferred trade in the accounting period in which it began carrying on the transferred trade. (944D) (1) Subsection (2) applies if— (a) this Chapter applies to a transfer of a trade, (b) the transferred trade is a ring-fence trade, (c) the predecessor made a non-decommissioning loss in the transferred trade in the accounting period in which it ceased to carry it on, (d) that accounting period began on or after 1 April 2017, and (e) relief under section 37 or 42 or Part 5 is not given for an amount of the loss. (2) Subsections (2) to (5) of section 303B (carry forward of non-decommissioning losses against subsequent profits) have effect as if— (a) references to the unrelieved amount were to the amount mentioned in subsection (1)(e), (b) references to the later period were to the accounting period of the successor in which the successor begins to carry on the transferred trade, (c) references to the company were to the successor, and (d) references to the trade were to the transferred trade. (3) Section 303A (meaning of non-decommissioning loss) applies for the purposes of this section. (4) In this section “ring fence trade” has the same meaning as in Part 8 (see section 277). (944E) (1) Subsection (2) applies if— (a) this Chapter applies to a transfer of a trade, (b) the trade is a ring-fence trade, (c) an amount of a loss made in the trade was carried forward under section 303B(2) or 303D(3) to the accounting period in which the predecessor ceased to carry on the trade (“the cessation period”), and (d) any of that amount was not— (i) deducted under section 303B(4) or 303D(5) from the predecessor's profit (if any) of the cessation period, (ii) deducted from the predecessor's total profits of the cessation period on a claim under section 303C(2), or (iii) surrendered by the predecessor by way of group relief for carried-forward losses under Part 5A. (2) Subsections (3) to (6) of section 303D have effect as if— (a) the reference to so much of the amount mentioned in section 303D(1)(a) as is unrelieved in the later period were to so much of the amount mentioned in subsection (1)(c) of this section as was not deducted or surrendered as mentioned in subsection (1)(d), (b) references to the further period were to the accounting period of the successor in which the successor begins to carry on the transferred trade, (c) references to the company were to the successor, and (d) references to the trade were to the transferred trade. (3) In this section “ring fence trade” has the same meaning as in Part 8 (see section 277).

66

In section 945 (cases in which predecessor retains more liabilities than assets) in subsection (4), for “section 944(3)” (in both places where those words occur) substitute “ sections 944 to 944E ”.

67

• (1) Section 951 (part of trade treated as separate trade) is amended as follows.

• (2) After subsection (6) insert—

(7) Subsection (8) applies if— (a) a company (“the transferor”) ceases to carry on a trade (“trade Z”), (b) another company (“the transferee”) begins to carry on the activities of trade Z as part of its trade (“part Z”) and (c) by reason of this Chapter an amount of a loss made in trade Z is carried forward under section 45A(4), 45B(2), 303B(2) or 303D(3) to an accounting period of the transferee. (8) The provisions of sections 45A to 45F and 303B to 303D have effect, in so far as they apply (or re-apply) in relation to the amount carried forward (or any part of it), as if the transferee carries or carried on part Z as a separate trade.

68

In section 952 (apportionment if part of trade treated as separate trade) in subsection (1) for “or (4)” substitute “ , (4) or (8) ”.

PART 9 — Tax avoidance

Restriction on refreshing losses

69

• (1) Section 730F of CTA 2010 (meaning of “relevant carried-forward loss”) is amended as follows.

• (2) In subsection (1)—

• (a) after paragraph (a) insert—

(aa) a carried-forward UK property business loss (see subsection (2A),

;

• (b) after paragraph (b) insert—

(ba) a carried-forward non-trading loss on intangible fixed assets (see subsection (3A),

.

• (3) In subsection (2)—

• (a) after “45” insert “ , 45A or 45B ”;

• (b) omit “against subsequent trade profits”.

• (4) In subsection (3), after “457” insert “ , 463G or 463H ”.

• (5) After subsection (2) insert—

(2A) “Carried-forward UK property business loss”, in relation to a company and an accounting period, means a loss in a UK property business carried on by the company which is carried forward from a previous accounting period under section 62(5).

• (6) After subsection (3) insert—

(3A) “Carried-forward non-trading loss on intangible fixed assets”, in relation to a company and an accounting period, means a non-trading loss on intangible fixed assets which is carried forward from a previous accounting period under section 753 of CTA 2009 (treatment of non-trading losses).

• (7) At the end insert—

(5) In this section “non-trading loss on intangible fixed assets” is to be read in accordance with Part 8 of CTA 2009.

Change in company ownership

70

Part 14 of CTA 2010 (change in company ownership) is amended as follows.

71

In section 672 (overview of Part) after subsection (1) insert—

(1A) Chapter 2A restricts relief in some further cases involving a change in the company's activities. (1B) Chapter 2B restricts relief for trading losses in some cases involving the transfer of an asset. (1C) Chapters 2C and 2D restrict group relief for carried-forward losses in some cases. (1D) Chapter 2E restricts relief for trading losses in some cases involving the transfer of a trade.

72

• (1) Section 673 (introduction to Chapter 2: disallowance of trading losses) is amended as follows.

• (2) In subsection (2), for “of 3 years in which the change in ownership” substitute “ beginning no more than 3 years before the change in ownership occurs which is a period of 5 years in which that change ”.

• (3) In subsection (4), in the words after paragraph (b), for “3” substitute “ 5 ”.

• (4) The amendments made by this paragraph do not have effect unless both the change in ownership referred to in section 673(1) and the major change in the nature or conduct of a trade referred to in section 673(2) occur on or after 1 April 2017.

73

• (1) Section 674 (disallowance of trading losses) is amended as follows.

• (2) In subsection (2), after “45” insert “ , 45B, 303B or 303D ”.

• (3) After subsection (2) insert—

(2A) No relief may be given under section 45A or 303C for a loss made by the company in an accounting period beginning before the change in ownership by carrying forward the loss and deducting it from a company's total profits of an accounting period ending after the change in ownership.

74

After section 674 insert—

(674A) (1) Section 674 does not prevent relief being given for a loss if— (a) the loss is made in a ring fence trade, (b) the loss is not a non-decommissioning loss, (c) it is condition A in section 673 that is met, and (d) the major change by reference to which that condition is met did not occur within a period of 3 years in which the change in ownership occurred. (2) In this section— - “non-decommissioning loss” is to be interpreted in accordance with section 303A; - “ring fence trade” has the same meaning as in Part 8 (see section 277).

75

After Chapter 2 insert—

(676AA) (1) This Chapter applies if conditions 1 and 2 are met. (2) Condition 1 is that on or after 1 April 2017 there is a change in the ownership of a company (“the transferred company”). (3) Condition 2 is that a major change in the business of the transferred company or a co-transferred company occurs within the required period but not before 1 April 2017. (4) The required period is— (a) for the purposes of section 676AF, any period beginning no more than 3 years before the change in ownership occurs which is a period of 5 years in which that change occurs, (b) for the purposes of sections 676AG to 676AK, the period of 8 years beginning 3 years before the change in ownership. (5) In this Chapter— - “the change in ownership” means the change in ownership mentioned in subsection (2); - “the transferred company” has the meaning given by subsection (2); - “trade” includes an office. (676AB) (1) If and so far as — (a) a relevant provision of this Chapter, and (b) a relevant provision of Chapter 2 or 3, would each (if the other provision were ignored) apply in relation to the same loss or other amount, the relevant provision of this Chapter does not apply in relation to that amount. (2) In this section “relevant provision”— (a) in relation to this Chapter means any of the provisions of sections 676AF to 676AK; (b) in relation to Chapters 2 and 3 means any of the provisions of sections 674 and 679 to 683. (676AC) (1) In this Chapter references to a “major change in the business” of a company include— (a) a major change in the nature or conduct of any trade or business carried on by the company, (b) a major change in the scale of any trade or business carried on by the company, and (c) beginning or ceasing to carry on a particular trade or business. (2) In subsection (1) the reference to a major change in the “nature or conduct” of a trade or business includes— (a) a major change in the type of property dealt in, or services or facilities provided in, the trade or business concerned, (b) a major change in customers, outlets or markets of the trade or business concerned, (c) a major change in the nature of the investments held by the company for the purposes of an investment business. (3) The definitions in subsections (1) and (2) apply even if the change is the result of a gradual process which began before the period of 5 years mentioned in section 676AA(4)(a) or (as the case may be) the period of 8 years mentioned in section 676AA(4)(b). (4) Where the condition in subsection (5) is met in the case of any two companies, the transfer of a trade or business, or any property, from one of them to the other is to be disregarded in determining for the purposes of section 676AA(3) whether or not there is a major change in the business of either of those companies. (5) The condition is that the companies are related to one another both— (a) immediately before the change in ownership, and (b) at the time of the transfer mentioned in subsection (4). (676AD) (1) This section applies for the purposes of this Chapter. (2) The accounting period in which the change in ownership occurs (“the actual accounting period”) is treated as two separate accounting periods (“notional accounting periods”), the first ending with the change and the second consisting of the remainder of the period. (3) Section 685 (apportionment of amounts) applies for the purposes of this Chapter as it applies for the purposes of Chapter 3. (4) The amounts for the actual accounting period in column 1 of the table in section 685(2) are apportioned to the two notional accounting periods in accordance with section 685. (5) In this Chapter, and in sections 685 and 686 as they apply by virtue of subsection (3), “the actual accounting period” and “notional accounting periods” have the same meaning as in this section. (676AE) (1) This section has effect for the purposes of this Chapter. (2) Profits of an accounting period ending after the change in ownership are “affected profits” if and so far as— (a) they arise before the 5th anniversary of the end of the accounting period of the transferred company in which the change in ownership occurs, and (b) they can fairly and reasonably be attributed to activities, or other sources of income, as a result of which, or partly as a result of which, the major change referred to in section 676AA(3) has occurred. (3) If an accounting period of the company begins before, and ends after, the anniversary mentioned in subsection (2), then for the purposes of that subsection— (a) the accounting period is treated as two separate accounting periods, the first ending with that date and the second consisting of the remainder of the period, and (b) the profits or losses of the accounting period are apportioned to the two periods. (4) Any apportionment under subsection (3)(b) is to be made on a time basis according to the respective lengths of the two deemed accounting periods. (5) But if that method of apportionment would work unjustly or unreasonably in any case, such other method is to be used as is just and reasonable. (676AF) A loss made by the transferred company in an accounting period beginning before the change in ownership may not be deducted from affected profits of an accounting period ending after the change in ownership under any of the following provisions— (a) section 45A(5) (carry-forward of post-1 April 2017 trade losses), (b) section 45F(3) (carried-forward losses: terminal relief), (c) section 303C(3) (excess carried-forward non-decommissioning losses of ring fence trade), and (d) section 124B(3) of FA 2012 (excess carried-forward BLAGAB trade losses). (676AG) (1) This section has effect for the purpose of restricting the debits to be brought into account for the purposes of Part 5 of CTA 2009 (loan relationships) in respect of the transferred company's loan relationships. (2) The debits to be brought into account for the purposes of Part 5 of CTA 2009 for— (a) the accounting period beginning immediately after the change in ownership, or (b) any subsequent accounting period, do not include relevant non-trading debits so far as amount A exceeds amount B. (3) Amount A is the sum of— (a) the amount of those relevant non-trading debits, and (b) the amount of any relevant non-trading debits which have been brought into account for the purposes of that Part for any previous accounting period ending after the change in ownership. (4) Amount B is the amount of the taxable total profits of the accounting period ending with the change in ownership. (5) For the meaning of “relevant non-trading debit”, see section 730. (676AH) (1) This section has effect for the purpose of restricting the carry forward under Chapter 16A of Part 5 of CTA 2009 (non-trading deficits: post 1 April 2017 deficits) of a pre-acquisition non-trading deficit from the transferred company's loan relationships. (2) For the purposes of this section an amount is a “pre-acquisition” non-trading deficit from a company's loan relationships if it is a non-trading deficit from the company's loan relationships for an accounting period beginning before the change in ownership. (3) Subsection (4) applies if, in the case of a pre-acquisition non-trading deficit from the transferred company's loan relationships, the non-trading deficit in column 1 of row 4 of the table in section 685(2) is apportioned in accordance with section 685(2) to the first notional accounting period. (4) None of that deficit may, by virtue of section 463G (carry forward of unrelieved deficit), be set off against affected profits of— (a) the accounting period beginning immediately after the change in ownership, or (b) any subsequent accounting period. (676AI) (1) This section has effect for the purpose of restricting relief under section 753 of CTA 2009 (treatment of non-trading losses) in respect of a relevant non-trading loss on intangible fixed assets. (2) An amount is a “relevant non-trading loss on intangible fixed assets” if and so far as— (a) it is by virtue of section 751 of CTA 2009 a non-trading loss on intangible fixed assets for a relevant pre-acquisition accounting period, or (b) it is made up of an amount falling within paragraph (a) which has been carried forward under section 753(3) of CTA 2009. (3) “Relevant pre-acquisition accounting period” means an accounting period beginning— (a) before the change in ownership, and (b) on or after 1 April 2017. (4) In the case of a relevant non-trading loss on intangible fixed assets, relief under section 753 of CTA 2009 against the total profits of the actual accounting period is available only in relation to each of the notional accounting periods considered separately. (5) A relevant non-trading loss on intangible fixed assets may not be deducted as a result of section 753(3) of CTA 2009 (losses carried forward) from affected profits of an accounting period ending after the change in ownership. (676AJ) (1) This section has effect for the purpose of restricting deductions for post-1 April 2017 relevant expenses of management of the transferred company. (2) Any amounts which— (a) are, or are treated as, expenses of management referable to the actual accounting period, and (b) are apportioned to either of the two notional accounting periods in accordance with section 685, are treated for the purposes of Chapter 2 of Part 16 of CTA 2009 (companies with investment business) as expenses of management referable to that notional accounting period. (3) Any allowances which are apportioned to either of the notional accounting periods in accordance with section 685 are treated for the purposes of section 253 of CAA 2001 and section 1233 of CTA 2009 (companies with investment business: excess capital allowances) as falling to be made in that notional accounting period. (4) In calculating the taxable total profits of an accounting period of the transferred company ending after the change in ownership— (a) relevant expenses of management, and (b) relevant allowances, may not be deducted from affected profits of the accounting period. (5) In this section “relevant expenses of management” means expenses of management which are first deductible under section 1219 of CTA 2009 for an accounting period beginning— (a) on or after 1 April 2017, and (b) before the change in ownership. (6) In this section “relevant allowances” means allowances falling to be made for an accounting period beginning— (a) on or after 1 April 2017, and (b) before the change in ownership. (676AK) (1) This section has effect for the purpose of restricting relief under sections 62 and 63 for a relevant UK property business loss made by the transferred company. (2) In this section “relevant UK property business loss” means a loss made in a UK property business in an accounting period beginning— (a) on or after 1 April 2017, and (b) before the change in ownership. (3) In relation to a relevant UK property business loss, relief under section 62(3) is available only in relation to each of the notional accounting periods considered separately. (4) A relevant UK property business loss may not be deducted as a result of section 62(5) or 63(3) from affected profits of an accounting period ending after the change in ownership. (676AL) (1) In this Chapter “co-transferred company” means any company which is related to the transferred company both immediately before and immediately after the change in ownership. (2) For the purposes of this Chapter any two companies (“T”) and (“C”) are “related” to one another at any time when— (a) the group condition is met in relation to T and C, or (b) any of consortium conditions 1 to 4 is met in relation to T and C, (whether on the assumption that T is the claimant company and C is the surrendering company or vice versa). (3) In this Chapter— - “consortium condition 1” is to be interpreted in accordance with section 188CF, - “consortium condition 2” is to be interpreted in accordance with section 188CG, - “consortium condition 3” is to be interpreted in accordance with section 188CH, - “consortium condition 4” is to be interpreted in accordance with section 188CI, - “the group condition” is to be interpreted in accordance with section 188CE.

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After Chapter 2A insert—