Corporation Tax Act 2010 section 269ZYA

Deductions allowance for company without a source of chargeable income

Section 269ZYA provides a special deductions allowance for companies that have no source of chargeable income but are subject to corporation tax solely because of chargeable gains on asset disposals.

• A company with no source of chargeable income (i.e. not within the charge to corporation tax or taxable only on chargeable gains from asset disposals) may claim a special deductions allowance for an accounting period falling wholly within a financial year, provided all group members also have no chargeable income throughout that year.
• The deductions allowance for a claimed accounting period is the lowest of: the available deductions allowance amount, the total of the company's unrelieved allowable losses from previous periods, and the chargeable gains arising in the claimed period.
• The available deductions allowance amount starts at £5,000,000 and is reduced by any deductions allowance amounts already claimed by the company and any fellow group members for accounting periods falling wholly within the same financial year.
• Claims must be made within two years of the end of the accounting period but not before the end of the relevant financial year, and where a company has both claimed and unclaimed accounting periods in the same year, the unclaimed periods receive a deductions allowance capped at the lower of the normal allowance and the remaining available amount.