Corporation Tax Act 2010 section 269ZD

Restriction on deductions from total profits

Section 269ZD limits the amount of carried-forward losses that a company can deduct from its total profits in any accounting period, by reference to a "relevant maximum" calculated from the company's deductions allowance and its relevant profits.

• The total of "relevant deductions" (carried-forward losses set against total profits) in any period cannot exceed the "relevant maximum" minus certain other specified deductions already made in that period.
• The "relevant maximum" is the company's deductions allowance for the period plus 50% of its "relevant profits" for the period.
• "Relevant deductions" include a wide range of carried-forward losses set against total profits, such as carried-forward trade losses, non-trading loan relationship deficits, management expenses, property losses, intangible asset losses, creative industry losses, and group relief for carried-forward losses.
• The restriction does not apply where the company's relevant profits (as calculated under step 1 of section 269ZF(3)) are nil or less.