Corporation Tax Act 2010 section 938S

Meaning of references to economic profits and losses

Section 938S defines how economic profits and losses are to be calculated for the purposes of the profit transfer and disguised interest rules.

• Economic profits and losses are computed by reference to the results arising under the Corporation Tax Acts.
• Adjustments must be made to reflect the time value of money — that is, the principle that a pound today is worth more than a pound in the future.
• Only profits and losses attributable to periods when the company is actually a party to the scheme are included in the calculation.
• Profits and losses falling outside the company's period of participation in the scheme are excluded, even if they arise during the overall scheme period.