Corporation Tax Act 2010 section 22

The ring fence amount

Section 22 explains how to calculate the marginal relief that applies specifically to ring fence profits, as the fourth of five rules governing marginal relief.

• This section deals with the calculation of marginal relief on the ring fence amount, which relates to profits from oil extraction and related activities.
• The calculation uses the appropriate portion of the upper limit, referred to as "UR", to determine the extent of marginal relief available.
• Marginal relief reduces the corporation tax payable when a company's profits fall between the lower and upper profit thresholds, easing the transition to the higher rate.
• The ring fence amount is treated separately because ring fence profits are subject to their own tax regime, distinct from the main rate of corporation tax.