Corporation Tax Act 2009 section 18L

Streaming

Section 18L allows a company electing for the foreign permanent establishment exemption to make an additional "streaming election", which separates the transitional treatment of accumulated losses on a territory-by-territory basis, so that losses in one territory do not delay the exemption applying to other territories.

• A streaming election must be made at the same time as the main election for foreign permanent establishment exemption, and must specify which territories are to be "streamed territories"
• The election replaces the standard approach of matching one overall opening negative amount with a territory-specific approach, so that each streamed territory's accumulated losses are tracked separately
• The election is irrevocable once the first exempt accounting period begins, but can be withdrawn at any time before that period starts
• To take effect, the company must state in its tax return for the first exempt period how much of the opening negative amount is allocated to each streamed territory, limited to what that territory's losses would have been if it were the company's only foreign permanent establishment