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HMRC internal manual

Banking Manual

Bank loss restriction: Introduction: overview of legislation – operative dates

Below is a summary of the loss restriction rules apply for the different periods from 1 April 2015.

1 April 2015 to 31 March 2016

For this period, banking companies are able to use their pre-1 April 2015 reliefs (relevant carried-forward losses) up to the limit of 50% of their relevant profits for this period. The relevant profits are calculated under the bank loss restriction rules in CTA10/S269CD (as it had effect prior to 31 March 2017) (see BKM304000).

Any unused relevant carried-forward losses can be carried forward and used in future accounting periods, subject to the restriction.

 

1 April 2016 to 31 March 2017

For this period, banking companies are able to use their unused relevant carried-forward losses up to the limit of 25% of their relevant profits for this period. The relevant profits are calculated under the bank loss restriction rules in CTA10/S269CD (as it had effect prior to 31 March 2017).

If a banking company has carried-forward losses that arose prior to this period (i.e. on or before 31 March 2016), but after 1 April 2015, there is no restriction on their use in this period (i.e from 1 April 2016 to 31 March 2017).

 

1 April 2017 onwards

For periods from 1 April 2017, banking companies are subject to both

  • the bank loss restriction on relief for their relevant carried-forward losses, and
  • the general restriction on relief for carried-forward losses.

Banking companies are able to use their relevant carried-forward losses up to the limit of 25% of their relevant profits for this period. The relevant profits are calculated under the general loss restriction rules in CTA10/S269ZF (see BKM305000).

If banking companies have carried-forward losses that arise after 1 April 2015, these will not be subject to the bank loss restriction, but will be subject to the general restriction on carried-forward losses.

 

There is an example of the rules prior to 1 April 2017 applying at BKM304950.

There is an example of the rules post-1 April 2017 applying at BKM305800.