Corporation Tax Act 2009 section 197

Further rules about allowable deductions

Section 197 sets out additional rules governing how deductions, particularly losses, are applied against post-cessation receipts, including the order in which they must be set off across accounting periods.

• An amount may only be deducted once against post-cessation receipts — no double counting is permitted.
• Losses must be set off against post-cessation receipts of earlier accounting periods before later ones.
• A loss cannot be set off against post-cessation receipts charged in an accounting period that falls before the period in which the loss itself arose.
• References to capital allowances found in the predecessor legislation are no longer needed, as capital allowances are now treated as trading expenses.