Corporation Tax Act 2010 section 937E

Scheme losses and scheme profits

Section 937E defines what constitutes a "scheme loss" or "scheme profit" for the purposes of the risk transfer scheme rules, including how these are calculated and what types of transactions they cover.

• A scheme loss or scheme profit is a loss or profit from a loan relationship or derivative contract that forms part of a risk transfer scheme, which arises due to fluctuations in the scheme's rate, index or value.
• Without the risk transfer scheme rules, such losses or profits would normally be brought into account under the standard loan relationship rules (Part 5 of CTA 2009) or derivative contract rules (Part 7 of CTA 2009).
• Where a scheme loss or profit needs to be calculated for a period that is not an accounting period of the company, it is determined as if that period were an accounting period.
• The definitions of scheme loss and scheme profit extend to losses or profits from related transactions and those of a capital nature.