Taxation (International and Other Provisions) Act 2010 section 55

Current year's non-trading deficits on loan relationships

Section 55 restricts how a company's current year non-trading deficit on loan relationships can be allocated when calculating the limit on double taxation credit relief.

• This section applies when a company either has no non-trading credits from loan relationships for the period, or has such credits but none of them qualify for double taxation relief.
• A non-trading credit is "eligible for double taxation relief" only if there is foreign tax on the underlying item for which credit is allowable under a double taxation arrangement against UK tax on that item.
• The section also requires that a non-trading deficit has been set against the company's profits for the current period under the loan relationships rules in CTA 2009 (whether the company is an insurance company or otherwise).
• Where both conditions are met, the deficit may only be allocated to those profits against which it has actually been set off under the CTA 2009 loan relationships provisions — it cannot be freely allocated to other profits for credit relief calculation purposes.