Corporation Tax Act 2010 section 323

Ring fence losses

Section 323 defines what constitutes a "ring fence loss" for oil and gas companies and establishes the rules for determining how much of a trading loss qualifies for the ring fence expenditure supplement.

• A ring fence loss arises when a qualifying oil and gas company incurs a trading loss in a post-commencement period and some or all of that loss must be carried forward to the next accounting period under the carry-forward provisions
• When calculating the amount eligible for supplement, it must be assumed that the company has made every possible claim to set losses from its ring fence trade against ring fence profits of earlier post-commencement periods
• It must also be assumed, where relevant, that the extended carry-back period available for ring fence trades has been used in relation to every such loss relief claim
• These rules are subject to a special provision dealing with accounting periods that straddle the commencement date