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HMRC internal manual

Banking Manual

Banking surcharge: calculation of surcharge profits: non-banking or pre-2016 loss relief – capital loss – effect of s171A election


A non-banking or pre-2016 carried-forward capital loss includes both an allowable capital loss which accrued to the company in a non-banking or pre-2016 accounting period and a capital loss transferred to the company from a non-banking company under a section 171A election.

The key time point for determining if a company is a non-banking company for the purpose of this section is the time when the chargeable loss, or such part of it as the election transfers, is treated as accruing under the s171A election (section 171B(3) TCGA1992).

The restriction of transferred-in losses from non-banking companies works in tandem with the adjustments for transferred-in and transferred out gains (BKM403850).  This means groups can continue to use s171A elections to reduce their CT chargeable profits and ensures that surcharge profits include all the chargeable gains arising to a banking company and exclude any non-banking gains transferred to the banking company.