Taxation (International and Other Provisions) Act 2010 section 156

"Losses" and "profits"

Section 156 defines what "losses" and "profits" mean for the purposes of the transfer pricing rules in Part 4 of the Act.

• The term "losses" is given a broad meaning that goes beyond actual trading losses to include various other amounts for which tax relief may be claimed.
• These additional amounts include pre-trading expenses for both income tax and corporation tax purposes, carried-forward interest relief, and non-trading deficits on loan relationships for insurance companies and other companies.
• The definition also covers excess management expenses of investment companies, group relief claims, and group relief for carried-forward losses.
• The term "profits" is similarly given a wide meaning and includes income, ensuring the transfer pricing rules can apply broadly.