BKM403500 - Banking surcharge: calculation of surcharge profits: non-banking or pre-2016 loss relief

CTA10/S269DC

The purpose of the non-banking or pre-2016 loss relief restriction is to restrict the use of losses arising to a banking company before it becomes liable to the surcharge. For a company which is a banking company on 1 January 2016 the restriction is in respect of losses arising before that date. For a company which becomes a banking company after that date, the restriction is in respect of losses which arise while the company is a non-banking company.

The non-banking or pre-2016 loss relief for a chargeable accounting period is the sum of:

a) any amounts deducted in determining the taxable total profits of the company for that chargeable accounting period in respect of non-banking or pre 2016 carried forward:

• trading loss
• non-trading loan relationship deficit
• management expenses
• UK property loss
• overseas property loss
• excess capital allowances on special leasing
• miscellaneous loss, or
• capital loss, and

b) any used amount for the chargeable accounting period in respect of a non-banking or pre 2016 non-trading loss on intangible fixed assets

The bank surcharge legislation does not specify an order of set-off for the types of relief at (a) but the used amount for non-banking or pre 2016 non-trading loss on intangible fixed assets is prescribed in the legislation (see BKM403700 for details).

See BKM403650 for guidance on adjustments required for capital losses transferred to a banking company under a TCGA92/S171A election.

If a banking company has an accounting period that straddles 1 January 2016, it will need to apportion any loss arising in this period between the two deemed accounting periods, as per the commencement provisions in F(No 2)A15/SCH3/PART3 (see BKM409100). This apportionment is for the purposes of the surcharge only.