Corporation Tax Act 2010 section 176

Cases in which both sections 170 and 174 apply

Section 176 deals with how to determine a company's share of profits or losses when two special allocation rules (the first rule in section 170 and the third rule in section 174) both apply at the same time, but the second rule in section 172 does not.

• This section applies where both section 170 (the first special rule) and section 174 (the third special rule) are relevant, but section 172 (the second special rule) is not.
• Three separate calculations must be performed to determine what proportion of profits or losses belongs to a particular company: one using the basis in section 170(2), one using the basis at Step 4 in section 174, and one combining those two bases together.
• A fourth calculation is also required, which ignores both sections 170 and 174 entirely and works out the proportion on the normal basis.
• Whichever of these four calculations produces the lowest proportion is the one that is treated as the company's actual share.