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HMRC internal manual

Banking Manual

Bank loss restriction: Calculation of carried-forward reliefs available: calculation of relevant profit APs from 1/4/17 – general


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 which are used in determining the amount of available relevant carried-forward losses (see BKM303200).

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 profits and qualifying non-trading profits (BKM305400) (CTA10/S269ZF/(3) steps 2, 4 and 5),
  • Subtract any deductions allowance (BKM305500) (CTA10/S269ZF(1) to (2)), and
  • Identify relevant trading profits, relevant non-trading profits and relevant profits (BKM305600) (CTA10/S269ZD(5), S269ZF(1) and (2)).

BKM305700 summarises the calculation required