Corporation Tax Act 2010 section 44

Trade must be commercial or carried on for statutory functions

Section 44 restricts the availability of trade loss relief under section 37 to losses arising from trades that are carried on commercially or under statutory functions.

• Trade loss relief is only available if the trade is carried on a commercial basis during the loss-making period
• The trade must be conducted with a view to making a profit, or with a reasonable expectation of doing so, including where the trade forms part of a larger profit-making undertaking
• If the way the trade is carried on changes during the loss-making period, it is treated as having been carried on throughout that period in the manner applying at the end of the period
• These restrictions do not apply where the trade is carried on in the exercise of statutory functions, including functions conferred by an Act of the Scottish Parliament