OT21058 | Corporation Tax Ring Fence: Losses and Group Relief: Losses Carried Forward: Integrity of the ring fence

CTA10/S304, S303 and CTA09/S463G, S463D

It is a fundamental premise of the ring fence that companies cannot set losses arising from non-ring-fence activities against ring fence profits. The changes to relief for losses from 1 April 2017 mean that, absent further new rules, it could be possible to set certain other types of carried forward loss against ring fence profits. CTA10/304(1A) prevents carried forward non-ring fence trade losses, UK property business losses, and non-trade losses on intangible fixed assets, all of which are subject to more flexible treatment from 1 April 2017, from being used against profits of a ring fence trade. CTA10/S303 prevents management expenses from being used in this way. CTA09/S463G(11) and s463D(5) apply in the same way for carried-forward non-trading loan relationship deficits.