Corporation Tax Act 2010 section 108

Meaning of "non-UK profits"

Section 108 defines the term "non-UK profits" as used in the group relief provisions that restrict the losses and other amounts available for surrender by both UK-resident and non-UK-resident companies.

• Non-UK profits are amounts that a foreign tax authority treats as the taxable profits, income or gains of a person (after deductions), together with any amounts taken into account in arriving at those figures.
• These amounts only qualify as non-UK profits if they do not correspond to, and are not already represented in, the total profits of any person for any UK accounting period.
• Where a non-UK-resident company's activities are exempt from UK tax under a double taxation agreement, the resulting profits are excluded from the company's UK total profits and can therefore still count as non-UK profits.
• The effect is that only genuinely foreign profits — those sitting entirely outside the UK corporation tax net — fall within the definition of non-UK profits for group relief purposes.