Corporation Tax Act 2009 section 199

Deductions already made are not displaced

Section 199 ensures that loss deductions already claimed against post-cessation receipts in later accounting periods are not retrospectively disturbed when a company elects to carry back a post-cessation receipt to the period of cessation.

• Where a company has permanently ceased trading and elects to carry back a post-cessation receipt to the cessation period, any loss deduction already made under section 196 for a later period is not displaced or recalculated as a consequence of that election.
• The protection applies specifically to loss deductions — expenses or debits already allowed under section 196 would not in any case be available for the cessation period, so they are unaffected.
• There is an exception: if the loss deduction was made in the same accounting period in which the carried-back receipt was received, the protection only covers the portion of the loss set against other post-cessation receipts, not the portion set against the receipt being carried back.
• The practical effect is that a carry-back election does not trigger a wholesale reopening of relief previously given in later periods, preserving certainty for the company's earlier computations.