Corporation Tax Act 2010 section 105

Restriction on surrender of losses etc. within section 99(1)(d) to (g)

Section 105 restricts the ability of a surrendering company to give up certain types of losses and other amounts as group relief, by limiting the surrender to the extent those amounts exceed the company's own profits.

• Only certain "relevant amounts" are restricted: qualifying charitable donations, expenditure on research and development or creative industries, UK property business losses, management expenses, and non-trading losses on intangible fixed assets — the main reliefs such as trading losses and non-trading loan relationship deficits are not caught by this restriction
• The company may only surrender relevant amounts to the extent that their total exceeds a "profit-related threshold", which is broadly the company's gross profits for the period plus any chargeable profits of controlled foreign companies apportioned to it
• Where a surrender is made, the amounts given up are treated as being used in a set order: first charitable donations, then qualifying expenditure, then UK property business losses, then management expenses, and finally non-trading losses on intangible fixed assets
• Gross profits for this purpose means the company's profits before deducting any of the items eligible for surrender, any losses or allowances brought forward from other periods, and any amounts carried forward under the rules for companies ceasing a UK property business or carrying forward management expenses