Corporation Tax Act 2010 section 72

Limit on deduction if accounting period falls partly within 12 month period

Section 72 limits the amount of share loss relief that can be deducted from a company's income where an accounting period only partly overlaps with the 12 month look-back period before the loss arose.

• This section applies when an accounting period straddles the start of the 12 month period ending immediately before the accounting period in which the share disposal loss was incurred.
• The deduction allowed under the relief mechanism in section 71 is capped at a proportionate share of the company's income for that partly overlapping accounting period.
• The proportion is calculated by comparing the part of the accounting period that falls within the 12 month look-back period to the total length of that accounting period.
• This prevents a company from claiming relief against income that relates to a period falling outside the relevant 12 month window.