Corporation Tax Act 2010 section 332EA

Carrying forward of activated allowance

Section 332EA provides that where a company's cumulative activated investment allowance exceeds its adjusted ring fence profits in an accounting period, the unused portion is carried forward to the next accounting period.

• Applies when a company's cumulative total of activated allowance is greater than its adjusted ring fence profits for an accounting period
• The difference between the activated allowance and the adjusted ring fence profits is carried forward
• The carried-forward amount moves to the next accounting period, where it can then be used
• This ensures that investment allowance entitlements are not lost simply because profits in a given period are insufficient to absorb them