Corporation Tax Act 2010 section 304

Losses

Section 304 restricts the use of losses from non-ring-fence activities against ring fence profits from oil extraction, and sets out how certain losses from deemed separate trades can be carried forward against income from related activities.

• Losses from activities outside the ring fence cannot generally be set against a company's ring fence profits; only losses arising from oil extraction activities or oil rights may be relieved against ring fence profits under the trade loss relief rules.
• Carried-forward trade losses, non-trading losses on intangible fixed assets, and UK property business losses are also specifically prevented from being offset against ring fence profits.
• Where a company incurs a loss in activities that are treated as a separate trade under the oil ring fence rules, and it also has trading income from related activities that would otherwise form part of the same trade, the loss can be carried forward and set against that related trading income in later periods.
• Deductions for losses carried forward from a ring fence trade (whether arising before or after 1 April 2017) are excluded from the corporate loss restriction rules that cap the amount of loss relief available against trading profits.