Corporation Tax Act 2010 section 269ZFA

Relevant profits

Section 269ZFA defines "relevant profits" for the purposes of the corporate loss restriction rules, explaining how they are calculated from a company's qualifying profits and deductions allowance.

• Relevant profits are calculated by taking a company's qualifying profits for an accounting period and subtracting its deductions allowance for that period.
• If the deductions allowance exceeds the qualifying profits, the relevant profits are treated as nil — they cannot be a negative figure.
• Qualifying profits are themselves derived by taking the company's modified total profits and subtracting in-year reliefs (such as group relief) that can be set against those profits.
• The deductions allowance is the amount of profit that a company can shelter using brought-forward losses and other carried-forward deductions before the restriction on those deductions applies.