BKM403700 - Banking surcharge: calculation of surcharge profits: non-banking or pre-2016 loss relief - non trading loss on intangibles

CTA10/S269DC(16)-(22)

The calculation of the used amount in respect of a non-banking or pre 2016 non trading loss on intangibles is prescribed in the banking surcharge legislation (paras (16) 바카라 사이트“ (22) S269DC).

The following example shows how to do the used amount calculation over a number of accounting periods with variable levels of non-trading debits and non-trading credits.

Accounting period ended 31 December 2018

  • Company C becomes a banking company
  • At 31 December 2017 it has a carried forward non-trading loss on intangibles of £600m.
  • In the accounting period ended 31 December 2018 it has non-trading debits of £70m and non-trading credits of £50m.

The 바카라 사이트˜relevant accounting period바카라 사이트˜ is 31/12/17 (para (17)) and Company C has a non-trading loss on intangibles at that date which is carried forward to the accounting period ended 31 December 2018 (para (16)).

The 바카라 사이트˜initially carried forward debit바카라 사이트™ is £600m (para (18)).

There is a 바카라 사이트˜used amount 바카라 사이트˜in the accounting period ended 31 December 2018 because (a) the £600m exceeds the aggregate of used amounts (0) and (b) there are non-trading credits of £50m. NB. The initially carried forward amount will always exceed the aggregate of used amounts until the £600m has been fully used.

The 바카라 사이트˜used amount바카라 사이트™ is calculated by reference to paras (20) and (21) and the first step is to determine 바카라 사이트˜the remaining carried forward amount바카라 사이트™. This is the excess in para (18)(a) that is the amount by which the initially carried forward amount exceeds the used amounts for that particular accounting period.

The 바카라 사이트˜remaining carried forward amount바카라 사이트™ is £600m and this is greater than the total of para (20)(a) non- trading credits 바카라 사이트“ £50m and (b) non-trading losses set off against other profits 바카라 사이트“ £0. Therefore the used amount is equal to the total of (a) and (b) = £50m. This is the figure to be used in calculating the total non-banking or pre 2016 reliefs.

Acounting period ended 31 December 2019

  • Company C has aggregate used amounts of £50m
  • Company C has non-trading debits of £80m and no non-trading credits

There is no 바카라 사이트˜used amount 바카라 사이트˜in the accounting period ended 31 December 2019 because although para 18(a) the £600m exceeds the aggregate of used amounts (£50m) (b) there are no non-trading credits or non-trading losses set off against other profits.

Accounting period ended 31 December 2020

  • Company C has aggregate used amounts of £50m
  • Company C has non-trading debits of £90m and non-trading credits of £280m and elects to set £200m of non-trading losses against other profits

There is a 바카라 사이트˜used amount 바카라 사이트˜in the accounting period ended 31 December 2020 because para 18(a) the £600m exceeds the aggregate of used amounts (£50m) and (b) there are non-trading credits of £280m and non-trading losses of £200m are set off against other profits.

The 바카라 사이트˜remaining carried forward amount바카라 사이트™ is £550m being the excess at para 18(a). This is greater than the total of para 20(a) non- trading credits 바카라 사이트“ £280m and (b) non-trading losses set off against other profits 바카라 사이트“ £200m. Therefore the used amount is equal to the total of (a) and (b) = £480m.

Accounting period ended 31 December 2021

  • Company C has aggregate used amounts of £530m
  • Company C has non-trading debits of £100m and non-trading credits of £80m.

There is a 바카라 사이트˜used amount 바카라 사이트˜in the accounting period ended 31 December 2021 because para 18(a) the £600m exceeds the aggregate of used amounts (£530m) and (b) there are non-trading credits of £80m.

The 바카라 사이트˜remaining carried forward amount바카라 사이트™ is £70m being the excess at para 18(a). This is less than the total of para 20 (a) non-trading credits 바카라 사이트“ £80m and (b) non-trading losses set off against other profits 바카라 사이트“ £0. Therefore the used amount is the remaining carried-forward debit for the period - £70m (para 20).

The total of used amounts (£50m+£480m+£70m) now equals the total of non-banking non-trading intangible losses (£600m) so no further add backs are required.