OT21520 | Corporation tax ring fence: onshore allowance - reduction of adjusted ring fence profits

CTA2010\S356D and S356DA

A company’s adjusted ring fence profits for an accounting period are reduced by the cumulative total amount of activated allowance for that accounting period (but profits are not to be reduced below zero). The cumulative amount of activated allowance for the accounting period is:

A + C

where:

• A is the total of any amounts of activated allowance the company has, for any sites, for the accounting period (S356E(2) or S356GB(1)), and

• C is any unused activated allowance carried forward from the previous period under S356DA. (It follows that for the first period in which the allowance is activated C will be nil).