BKM403625 | Banking surcharge: calculation of surcharge profits: non-banking or pre-2016 loss relief – order of set off

CTA10/S269DC

The bank surcharge legislation does not specify an order of set-off for amounts at (a) in BKM403500 and in practice we expect banking companies will choose to use loss reliefs which arise after the company is first liable to the bank surcharge before non-banking or pre-2016 loss reliefs.

Unlike the other losses listed at (a) in BKM403500, for the purposes of calculating taxable total profits, management expenses and UK property losses carried forward are treated as losses of the current period and allowed against total profits. Non-banking or pre-2016 management expenses or UK property losses must be distinguished from other management expenses and UK property losses for the purposes of the surcharge. As there is no order of set off the banking company can choose whether any UK property losses or management expenses used in arriving at its taxable total profits for a chargeable accounting period are losses or management expenses of the current period or losses or management expenses brought forward.