Corporation Tax Act 2010 section 398D

Restrictions on use of losses etc.

Section 398D restricts the types of losses, deficits, reliefs and deductions that can be used against the profits a company earns from carrying on the relevant activity.

• Losses from trades, UK property businesses, charitable donations, non-trading loan relationships and intangible fixed assets cannot be set against profits from the relevant activity unless those losses themselves arose from that same activity
• Group relief (including group relief for carried-forward losses) from other group companies cannot be surrendered against profits attributable to the relevant activity
• Management expenses of an investment business cannot be deducted from profits of the relevant activity unless the expenses themselves relate to that activity
• If the company would otherwise qualify as a tonnage tax company, it is treated as not being one