Corporation Tax Act 2010 section 937G

Ring-fenced scheme loss: treatment in period in which made

Section 937G sets out the rules for determining how much (if any) of a ring-fenced scheme loss a company may bring into account in the accounting period in which that loss arises.

• If the company's profits pool for the scheme is nil at the start of the period, no ring-fenced scheme loss may be brought into account at all.
• If the profits pool is positive but less than the total ring-fenced scheme losses for the period, only a proportionate share of each loss may be recognised, calculated as the opening profits pool divided by the total ring-fenced scheme losses.
• If the profits pool at the start of the period equals or exceeds the total ring-fenced scheme losses for the period, the losses may be brought into account in full.
• Bringing a ring-fenced scheme loss into account means recognising it when calculating debits or credits under the loan relationships rules (Part 5 of CTA 2009) or the derivative contracts rules (Part 7 of CTA 2009).