Corporation Tax Act 2010 section 269ZJ

Exclusion of shock losses from restrictions

Section 269ZJ provides that shock losses incurred by insurance companies are excluded from the corporate loss restriction rules, allowing these losses to be deducted in full without being subject to the usual caps on carried-forward loss relief.

• Shock losses carried forward and set against an insurance company's trading profits are excluded from the restriction on deductions from trading profits, meaning they can be deducted in full up to the amount of those trading profits.
• Shock losses carried forward and set against an insurance company's non-trading profits (such as non-trading loan relationship deficits) are similarly excluded from the restriction on deductions from non-trading profits.
• Any deduction of a shock loss by an insurance company is not treated as a "relevant deduction" for the purposes of the restriction on deductions from total profits, so it does not count towards the cap applied to other carried-forward losses.
• The definitions of "insurance company" and "shock loss" are set out in other provisions within the same Part of the Act.