Section 40 Ring fence trades: extension of periods for which relief may be given

United Kingdom

(1)

This section applies if—

(a)

in an accounting period a company makes a loss in a ring fence trade (as defined in section 162 of CAA 2001),

(b)

the accounting period is an accounting period F1for which any allowances under section 164 or F2by virtue of section 416ZA of CAA 2001 are made to the company in respect of decommissioning expenditure, and

(c)

not all the loss is a terminal loss (see section 39(3) above).

(2)

Sections 37(3)(b) and 38(1) and (3) have effect in relation to the loss (so far as it is not a terminal loss) as if the references to 12 months were references to 3 years.

(3)

But if the loss exceeds F3the sum of the allowances mentioned in subsection (1)(b), subsection (2) applies in relation to the loss only so far as it does not exceed F4that amount.

F5(3A)

In this section “decommissioning expenditure” has the meaning given by section 330C.

(4)

This section is subject to section 41.

Annotations

Textual amendments

F1: Words in s. 40(1)(b) substituted (with effect in accordance with Sch. 21 para. 6 of the amending Act) by Finance Act 2012 (c. 14), Sch. 21 para. 5(2)
F2: Words in s. 40(1)(b) substituted (with effect in accordance with s. 92(10) of the amending Act) by Finance Act 2013 (c. 29), s. 92(8)
F3: Words in s. 40(3) substituted (with effect in accordance with Sch. 21 para. 6 of the amending Act) by Finance Act 2012 (c. 14), Sch. 21 para. 5(3)(a)
F4: Words in s. 40(3) substituted (with effect in accordance with Sch. 21 para. 6 of the amending Act) by Finance Act 2012 (c. 14), Sch. 21 para. 5(3)(b)
F5: S. 40(3A) inserted (with effect in accordance with Sch. 21 para. 6 of the amending Act) by Finance Act 2012 (c. 14), Sch. 21 para. 5(4)

Notes on Part 4

Modifications

C1: Pt. 4 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Risk Transformation (Tax) Regulations 2017 (S.I. 2017/1271), regs. 1(1), 10
C2: Pt. 4 excluded (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), s. 1(5)(e) (with ss. 15(1), 16(1))

Notes on Relief in loss-making period and carry back relief

Textual amendments

F1: S. 37 cross-heading substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 9