Taxation of Chargeable Gains Act 1992 section 2A

Company's total profits to include chargeable gains

Section 2A sets out how chargeable gains are calculated for inclusion in a company's total profits for corporation tax purposes, including the treatment of allowable losses and special rules for companies with multiple accounting periods in the same financial year.

• A company's total profits include its chargeable gains for the accounting period, reduced by allowable losses from the same period and any unused allowable losses carried forward from earlier periods when the company was within the charge to corporation tax.
• A loss only qualifies as an allowable loss if, had a gain arisen instead, the company would have been chargeable to corporation tax on that gain.
• Where a company has two or more accounting periods falling wholly within the same financial year, is chargeable to corporation tax in each only because of a chargeable gain on an asset disposal, and is not within the charge to corporation tax between those periods, special loss-sharing rules apply.
• Under those special rules, allowable losses from one such accounting period within the same financial year can be set against chargeable gains in another such period, provided the losses have not already been deducted elsewhere.