BKM401300 - Banking surcharge: introduction: overview of the legislation

CTA10/Part 7A Chapter 4

These rules are relevant to banking companies and bring in a surcharge on the profits of these companies. The profits are calculated on the same basis as for corporation tax, but with certain adjustments – see below. The surcharge is levied on profits of banking companies for accounting periods beginning on or after 1 January 2016 (including accounting periods that straddle that date. See BKM409000 for the commencement rules.

The surcharge is treated as an amount chargeable as if it were CT. Double taxation relief will be allowed on the surcharge on a similar basis as for CT (BKM407100).

The profits for the purposes of the surcharge will be the “taxable total profits” (CTA10/S4) with the following adjustments:

add

• any group relief for the period from non-banking companies (BKM403400)
• any losses arising before 1 January 2016 or, if later before the company became a non-banking company (BKM403500)
• any chargeable gains transferred out to non-banking companies (BKM403850)

deduct

• any chargeable gains transferred in from non-banking companies (BKM403850)
• any R&D expenditure credits (BKM403900)