BKM305100 - Bank loss restriction: Calculation of carried-forward reliefs available: calculation of relevant profit APs from 1/4/17 – general
CTA10/S269ZF and S269ZFA
This calculation applies for periods from 1 April 2017. For earlier periods, relevant profits are calculated in accordance with the calculation at CTA10/S269CD (see BKM304300 to BKM304400).
Before calculating total profits and total taxable profits for the period under CTA10/S4, the banking company must calculate its relevant profits under CTA10/S269ZF.
The calculation is a staged process producing three separate figures: relevant trading profits, relevant non-trading profits, and relevant profits. These figures are used to determine the amount of relief available for relevant carried-forward losses, in accordance with the bank loss restriction (see BKM303200).
The same figures for relevant profits are also used to calculate the general restriction on relief for carried-forward losses at CTA10/PART7ZA (CTM05000+).
The company calculates the relevant profits as follows:
- Calculate modified total profits (BKM305200) (CTA10/S269ZF(3) step 1),
- Divide modified total profits into trading profits and non-trading profits (BKM305300) (CTA10/S269ZF(3) step 3),
- Deduct in-year reliefs to find the qualifying trading, non-trading and total profits (BKM305400) (CTA10/S269ZF/(3) steps 2, 4 and 5, S269ZFA(2)),
- Subtract any deductions allowance (BKM305500) (CTA10/S269ZF(1) to (2)), and
- Identify relevant trading profits, relevant non-trading profits and relevant profits (BKM305600) (CTA10/S269ZFA, S269ZF(1) and (2)).
BKM305700 summarises the calculation required.