Corporation Tax Act 2010 section 279C

Company with ring fence profits and other profits

Section 279C sets out how marginal relief from corporation tax is calculated where a UK-resident company has both ring fence profits (typically from oil and gas extraction activities) and other profits, and its augmented profits fall between the lower and upper limits.

• The section applies to UK-resident companies that are not close investment-holding companies, whose augmented profits exceed £300,000 but do not exceed £1,500,000, and whose profits include both ring fence and non-ring fence elements.
• The corporation tax charged on the company's taxable total profits is reduced by two separate amounts calculated using different marginal relief fractions — one for the ring fence element and one for the remainder.
• The ring fence portion of the reduction is found by applying the ring fence marginal relief fraction to the ring fence amount, while the standard marginal relief fraction is applied to the remaining amount.
• The total tax reduction is the sum of these two components, ensuring that the distinct tax treatment of ring fence profits is preserved within the marginal relief calculation.