396A Relief for relevant trading losses.
(1) In this section—
“relevant trading income” has the same meaning as in section 243A; “relevant trading loss”, in relation to an accounting period of a company, means a loss incurred in the accounting period in a trade carried on by the company, other than so much of the loss as is a loss incurred in an excepted trade within the meaning of section 21A.
(2) Notwithstanding subsection (2) of section 396, for the purposes of that subsection the amount of a loss in a trade incurred by a company in an accounting period shall be deemed to be reduced by the amount of a relevant trading loss incurred by the company in the accounting period.
>Subject to section 455, where< in an accounting period a company carrying on a trade incurs a relevant trading loss, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against income of the company, being—
(a) income specified in
>section 21A(4)(b)<, >and<
(b) relevant trading
of that accounting period and, if the company was then carrying on the trade and if the claim so requires, of preceding accounting periods ending within the time specified in subsection (4), and subject to that subsection and any relief for an earlier relevant trading loss, to the extent that the income of any of those accounting periods consists of or includes income specified in
>section 21A(4)(b)< or relevant trading income, that income shall then be reduced by the amount of the relevant trading loss or by so much of that amount as cannot be relieved against income of a later accounting period.
(4) For the purposes of subsection (3), the time referred to in paragraph (b) of that subsection shall be the time immediately preceding the accounting period first mentioned in subsection (3) equal in length to that accounting period; but the amount of the reduction which may be made under subsection (3) in the relevant trading income of an accounting period falling partly before that time shall not exceed such part of that relevant trading income as bears to the whole of the relevant trading income the same proportion as the part of the accounting period falling within that time bears to the whole of that accounting period.