The measure will restrict the proportion of banks’ annual taxable profit that can be offset by carried forward losses to 50%.
The restriction will apply to carried forward:
- trading losses
- non-trading loan relationship deficits
- management expenses
The restriction will take effect from 1 April 2015 and will only apply to reliefs accruing prior to this date. The targeted anti-avoidance rule which forms part of the measure will apply to arrangements entered into on or after 3 December 2014.
A draft legislation for this measure has been published at Draft legislation: Corporation Tax - bank loss relief restriction.