Corporation Tax Act 2010 section 937I

A company's losses pool and profits pool

Section 937I explains how to calculate the running totals of a company's accumulated losses pool and profits pool for a risk transfer scheme at the start of each accounting period.

• Both the losses pool and the profits pool are calculated using the same basic formula: opening balance, plus additions from the previous period, minus amounts used up in the previous period.
• The losses pool tracks ring-fenced scheme losses that have not yet been relieved, increasing when losses cannot be used in the period they arise and decreasing when losses are offset against profits in later periods.
• The profits pool tracks accumulated scheme profits that have not yet been absorbed by losses, increasing when scheme profits exceed losses offset against them and decreasing when losses from the period in which they arose are set against those profits.
• If the risk transfer scheme only began in the current accounting period, both pools start at nil.