Policy paper

Draft legislation: Corporation Tax - bank loss relief restriction

This draft legislation is about restricting the proportion of banks’ annual taxable profit that can be offset by carried forward losses to 50%.

Documents

Draft legislation: Corporation Tax - bank loss relief restriction

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Details

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 Tax Information and Impact Note for this measure has been published at Corporation Tax: bank loss relief restriction.

A technical note providing detail of how the proposed legislation will operate has been published at Restriction on brought forward reliefs in the UK banking sector - technical note.

Published 3 December 2014