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On 3 December 2014 the Chancellor of the Exchequer announced that the government will introduce legislation in the Finance Bill 2015, which will restrict the proportion of banks’ annual taxable profit that can be offset by certain carried forward reliefs to 50%. The restriction will apply to carried forward of trading losses, non-trading loan relationship deficits, and management expenses. The restriction will take effect from 1 April 2015 and will only apply to relevant reliefs accruing prior to this date.
This technical note has been updated to reflect changes to the legislation following technical consultation. The new chapter 8 covers an allowance for building societies and their groups, and chapter 9 now deals with the targeted anti-avoidance rule and provides details of the addition of a motive test.