What is the purpose of Corporation Tax Act 2010 section 122?

Section 122 serves as an introductory signpost provision that directs readers to sections 123 through 126 of the Corporation Tax Act 2010. These subsequent sections contain the detailed assumptions that must be applied when recalculating the EEA (European Economic Area) amount for corporation tax loss restriction purposes under United Kingdom law.

Why can't a company simply use the raw EEA figures in its corporation tax computation?

United Kingdom legislation requires that the EEA amount be recalculated using specific assumptions set out in sections 123 to 126 of the Corporation Tax Act 2010. These assumptions modify how certain income is treated and how particular deductions are recognised, ensuring a consistent and standardised approach rather than relying on raw figures.

How does section 122 interact with sections 123 to 126 of the Corporation Tax Act 2010?

Section 122 acts as a framework introduction directing the reader to sections 123 through 126. Each of those sections sets out a specific assumption that modifies the recalculation of the EEA amount. All four sets of assumptions must be applied together in turn to produce the correctly recalculated EEA amount for corporation tax purposes.

Has section 122 of the Corporation Tax Act 2010 been amended?

Yes, section 122 was newly introduced as part of the Corporation Tax Act 2010 and was subsequently amended by Finance Act 2022, section 24(3). It is important to ensure you are working with the current version of the legislation when performing any recalculation of the EEA amount under United Kingdom corporation tax law.

Corporation Tax Act 2010 section 122

Assumptions to be made in recalculating EEA amount

Section 122 introduces the framework of assumptions that must be applied when recalculating the EEA (European Economic Area) amount for the purposes of the loss restriction rules.

This section acts as an introductory provision, directing the reader to sections 123 to 126 which contain the detailed assumptions for recalculating the EEA amount.
The EEA amount must be recalculated using specific assumptions set out in the subsequent sections, rather than simply taking the figures at face value.
These assumptions ensure a consistent and standardised approach when determining EEA-related amounts for corporation tax purposes.
This provision was newly introduced and has been amended by Finance Act 2022, section 24(3).

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