Corporation Tax Act 2010 section 279D

The ring fence amount

Section 279D defines how to calculate "the ring fence amount" used in section 279C, by applying a formula based on the company's ring fence profits, augmented profits, and the upper profits limit.

• The ring fence amount is calculated using the formula (UR − AR) × (NR / AR)
• UR is derived by multiplying the upper profits limit by the proportion that ring fence augmented profits bear to total augmented profits (AR / A)
• AR represents the ring fence profits included in augmented profits, while NR represents the ring fence profits included in taxable total profits
• The formula effectively measures the marginal relief fraction attributable to ring fence profits, scaling it by the ratio of taxable ring fence profits to augmented ring fence profits