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HMRC internal manual

Banking Manual

Bank loss restriction: targeted anti-avoidance rule: anti-forestalling rule

FA15/Schedule 2/paragraph 9

The anti-forestalling rule is designed to prevent companies reducing the amounts of relevant carried-forward losses subject to the restriction by increasing the amount of such losses used prior to 1 April 2015.

The rule applies to arrangements entered into on or after 3 December 2014 and which have an effect in accounting periods ending before 1 April 2015.  This will include split periods (see commencement guidance in BKM309100).

There are three conditions for the rule to apply:

  • The banking company has profits that arise in a period ending before 1 April 2015 as a result of arrangements
  • Absent the rule the company would be able to use relevant carried-forward losses against the profits of the arrangement
  • The main purpose, or one of the main purposes, of the arrangements was to secure a corporation tax advantage as a result of the fact that the restriction did not apply in that period.

For the meaning of corporation tax advantage see BKM307100.

For guidance on considering the scope of the arrangements see BKM307200.