Corporation Tax Act 2010 section 318

Reduction in respect of unrelieved group ring fence profits

Section 318 reduces the amount of qualifying pre-commencement expenditure that can be added to the ring fence expenditure supplement pool, where there are unrelieved group ring fence profits for the relevant pre-commencement period.

• This section applies where there are unrelieved group ring fence profits (as defined in section 313) for a pre-commencement period
• The reduction targets expenditure that could have been surrendered as group relief rather than carried forward for supplement
• Amount E for the period (after any reduction under section 317 for disposal receipts) is reduced by the total of unrelieved group ring fence profits for that period, but not below nil
• The effect is to restrict the ring fence expenditure supplement so that companies cannot benefit from supplement on losses they could instead have offset against profits of fellow group members