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HMRC internal manual

Banking Manual

Bank loss restriction: calculation of carried-forward reliefs available: calculation of relevant profit - assumed allocation of relief

CTA10/S269CD(1) steps 5 and  6

Steps 5 and 6 of the calculation of relevant trading profits and relevant non-trading profits under CTA10/S269CD, assume a proportionate split when allocating relief against trading profits and non-trading profits (BKM304400).

Although the calculation under S269CD should use the same profits, reliefs, and deductions the company will use in its actual tax calculation under CTA10/S4, this assumption of a proportionate split is only for the purposes of calculating relevant trading profits and relevant non-trading profits (see the guidance and example regarding claims under CTA09/S459(1)(b) at BKM306350).

Aside from the distinction between trading and non-trading profits there may be cases where there are other distinctions within these two types of profit.  As the legislation does not prescribe any more detailed allocation, it is left to the banking company to decide how relief is allocated within trading profits and within non-trading profits, within the normal rules.  Such assumptions that the company intends to make in its tax calculation should also be made in the calculation under S269CD.