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HMRC internal manual

Banking Manual

Bank loss restriction: carried forward reliefs outside the restriction: reliefs for new entrant banks – extra information

A banking company’s start-up period runs for five years beginning with the first day a company undertakes relevant regulated activity.  A company’s start-up period may be reduced (potentially entirely) under certain circumstances as described in BKM306500.

Reliefs arising during a company’s start-up period are taken to be used before any relevant carried-forward losses (CTA10/S269CF(4)).

A banking company’s start-up period may end part way through an accounting period.  Where this happens and a company would carry-forward a relevant relief from the straddling accounting period it will be split into two accounting periods.  The amount of relief arising in the split period ending with the start-up period will not be restricted, whilst the amount of relief arising in the later split period will.

The relief is apportioned on a time basis, unless that basis would be unjust or unreasonable, in which case a different method of apportioning the relief can be used.