Corporation Tax Act 2010 section 433

Restrictions applying to the restricted loss amount

Section 433 is an anti-avoidance provision that restricts how a company can use the "restricted loss amount" arising from a sale of lessors transaction, limiting relief essentially to set-off against income from qualifying plant or machinery leases entered into before the relevant expense date.

• The restricted loss amount cannot be relieved under the normal loss relief provisions (trade loss carry forward, property business losses, or miscellaneous transaction losses) unless it is set against "relevant leasing income" from qualifying plant or machinery leases entered into before the date the expense arose
• Where the company carries on a trade, the restricted loss amount cannot be set against total profits under the sideways trade loss relief rules or the carry-forward against total profits rules
• The restricted loss amount cannot be surrendered as group relief, whether as a current-period loss or as a carried-forward loss
• "Relevant leasing income" is income from plant or machinery leases that are not excluded leases of background plant or machinery for a building, and that were entered into before the day the company is treated as incurring the relevant expense