Dealing with HMRC – policy paper

Corporation Tax: bank loss relief restriction

This Tax Information and Impact Note is about restricting the proportion of banks’ annual taxable profit that can be offset by carried forward losses to 50%.

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Detail

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.