769K Adaptation of provisions relating to relief for relevant trading losses and relevant charges on income

Summary

Losses and charges which represent the same portion of the loss of the specified trade as the profits which would have qualified for KDB treatment will only be available for use against the other profits of the company on a value basis.

Details

(1) The same formula which was applied to the profit of the specified trade in determining the qualifying profits should be applied to any relevant trading losses or relevant charges on income arising from the specified trade. The formula is:

where –

QE is the qualifying expenditure on the qualifying asset,

UE is the uplift expenditure, and

OE is the overall expenditure on the qualifying asset.

(2) The reduced relevant trading loss or relevant trading charge can then be relieved, on a value basis, under section 243A, 396A, 420A, 243B, 396B or 420B. The value basis is achieved by reducing the loss or charge by 50%.

(3) Where subsequent claims are made, the amount available for relief should be reduced by 200%.

Relevant Date: Finance Act 2021