Corporation Tax Act 2010 section 188BI

Restriction on surrender of losses made when non-UK resident

Section 188BI restricts the amount of carried-forward losses that a non-UK resident company trading in the UK through a permanent establishment may surrender as group relief.

• The section applies where a company was non-UK resident but within the charge to corporation tax during the period in which the loss arose, and the loss is carried forward to a later surrender period.
• Condition A requires that the loss relates to activities for which the company was within the charge to UK corporation tax in the loss-making period.
• Condition B requires that the loss is not attributable to activities that were exempt from UK tax under a double taxation agreement in the loss-making period.
• Condition C requires that the loss (and any amounts used in calculating it) has not been, and does not correspond to an amount that has been, deductible or otherwise relievable against non-UK profits of any person under any foreign tax law.