Corporation Tax Act 2010 section 328A

Adjustment of pool to remove pre-2013 losses after the initial 6 periods

Section 328A adjusts the ring fence pool after the initial 6 claim periods by stripping out losses and supplement that arose before 5 December 2013, so that the additional 4 periods of ring fence expenditure supplement only benefit post-2013 activity.

• After the last of the initial 6 claim periods (or 5 December 2013 if later), the ring fence pool is reduced by the amount of pre-2013 losses, carried-forward Exploration Expenditure Supplement amounts, and pre-2013 post-commencement supplement, less any reductions already made to the pool under sections 327 or 328
• Where a company commenced trading on or after 5 December 2013, any commencement-year loss included in the pool is also removed, but only up to the value of pre-commencement expenditure and supplement that related to periods before that date
• If an accounting period straddles 5 December 2013, losses, supplement and pool reductions falling within that period are apportioned between the pre-2013 and post-2013 portions on a time basis (number of days), unless the company elects for an alternative just and reasonable basis
• Losses removed from the pool under this section do not trigger further pool reductions under section 327 when carried forward, and must be set against future profits under section 45 before any ring fence losses that remain in the pool are used