Corporation Tax Act 2009 section 1104

Meaning of "Chapter 7 surrenderable loss"

Section 1104 defines what constitutes a "Chapter 7 surrenderable loss" for the purposes of R&D tax credit claims by companies.

• A Chapter 7 surrenderable loss is the amount of trading loss that a company can surrender in exchange for a payable R&D tax credit under Chapter 7.
• The surrenderable loss is restricted so that it only covers the additional deduction element of the R&D relief, not the underlying expenditure itself.
• This restriction exists because a company claiming under Chapter 7 will already have received relief for the underlying expenditure through a prior claim under Chapter 2.
• The definition follows a similar pattern to the Chapter 2 surrenderable loss in section 1055, but with this narrower scope reflecting the different circumstances of a Chapter 7 claim.