Corporation Tax Act 2010 section 356D

Reduction of adjusted ring fence profits

Section 356D allows a company to reduce its adjusted ring fence profits for an accounting period by the cumulative total of its activated onshore allowance, ensuring the profits cannot be reduced below zero.

• A company's adjusted ring fence profits for an accounting period are reduced by the cumulative total amount of activated allowance, but cannot be reduced below zero.
• The cumulative total is calculated as A + C, where A is the total activated allowance for all sites in the accounting period (including any reference periods within it) and C is any activated allowance carried forward from a previous period.
• Activated allowance can arise either for the accounting period as a whole or for shorter reference periods that fall within the accounting period.
• Any activated allowance that exceeds the adjusted ring fence profits is not lost outright — it may be carried forward to future periods under the carry-forward rules.