BKM303100 | Bank loss restriction: carried-forward reliefs to which restriction applies: introduction

As discussed in BKM301100, the bank loss restriction rules are relevant to banking companies and restrict the following carried-forward deductions, where they arose in the banking company before 1 April 2015:

• Trading losses,

• Non-trading loan relationship deficits, and

• Management expenses.

These are collectively referred to as relevant carried-forward losses. BKM303150 has more details, including what is meant by arising before 1 April 2015.

The bank loss restriction does not apply where the carried-forward reliefs:

• arise before a company begins a relevant regulated activity (see BKM306400),

• arise to a new entrant bank in its start-up period (see BKM306500), or

• are designated as unrestricted through the allowance for building societies (see BKM306700).

The amount of the restriction has varied for different periods from 1 April 2015. A summary can be found at BKM301300.

BKM309100 has further guidance on apportioning profits or losses for accounting periods that straddle 1 April 2015 or 1 April 2016.

See BKM304100 for guidance on calculating a banking company’s relevant profits for periods from 1 April 2015 to 31 March 2017.

See BKM305100 for guidance on calculating a banking company’s relevant profits for periods from 1 April 2017 onwards.