What does section 43 of the Corporation Tax Act 2010 do?

Section 43 extends the normal two-year time limit for making trade loss relief claims under section 37 of CTA 2010. It applies where a company has carried on a ring fence trade or mineral extraction trade and incurs decommissioning or site restoration expenditure after the trade has ceased, allowing additional time to claim relief for losses arising from that expenditure.

How long is the extended claim period for ring fence trade decommissioning losses?

For losses arising from post-cessation decommissioning expenditure in a ring fence trade, the claim deadline is extended to two years after the end of the post-cessation period defined in section 165 of the Capital Allowances Act 2001. This recognises that decommissioning costs for oil rigs and platforms may not become clear until well after the trade has stopped.

What is the extended claim period for mineral extraction site restoration losses?

For losses arising from site restoration expenditure in a mineral extraction trade, the normal two-year claim deadline is replaced by a five-year period. Sections 416 and 416ZA of CAA 2001 treat site restoration expenditure as qualifying expenditure incurred on the last day of trading, and the extended period reflects that such costs may not be finalised quickly.

Does the extended time limit under section 43 apply to the entire trade loss claim?

No. The extended time limits apply only to the portion of the loss relief claim that relates to the relevant decommissioning or site restoration expenditure. Any other element of the trade loss claim remains subject to the standard two-year deadline under the normal rules in section 37 of CTA 2010.

Corporation Tax Act 2010 section 43

Claim period in case of ring fence or mineral extraction trades

Section 43 extends the normal two-year time limit for making trade loss relief claims where a company has carried on a ring fence trade (typically oil and gas extraction) or a mineral extraction trade, and incurs decommissioning or site restoration expenditure after the trade has ceased.

This section applies where a company's qualifying expenditure increases due to general decommissioning costs incurred after ceasing a ring fence trade, or where site restoration expenditure is treated as qualifying expenditure on the last day of trading in a mineral extraction trade.
For losses arising from post-cessation decommissioning expenditure in a ring fence trade, the normal two-year claim deadline is extended to two years after the end of the post-cessation period defined in section 165 of CAA 2001.
For losses arising from site restoration expenditure in a mineral extraction trade, the normal two-year claim deadline is extended to five years.
These extensions only apply to the portion of the loss relief claim that relates to the relevant decommissioning or site restoration expenditure, not to the claim as a whole.

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