SCHEDULES

SCHEDULE 5Non-UK resident companies carrying on UK property businesses etc

PART 3Commencement and transitional provisions

37Transitional provisions

1

This paragraph applies if—

a

in a tax year ending before the commencement date a company makes a loss in a UK property business that is within the charge to income tax,

b

relief for the purposes of income tax is not given to the company for an amount of the loss (“the unrelieved amount”), and

c

on the commencement date the UK property business ceases to be within the charge to income tax and comes within the charge to corporation tax as a result of section 5(3A) of CTA 2009.

2

Relief for the purposes of corporation tax is given to the company under this paragraph for the unrelieved amount.

3

For this purpose—

a

the unrelieved amount is carried forward to post-commencement accounting periods of the company (for so long as the company continues to carry on the UK property business), and

b

the profits of any such accounting period that are mentioned in sub-paragraph (4) are to be reduced by the unrelieved amount (so far as that amount cannot be used under this paragraph to reduce the profits of an earlier period).

4

The profits are—

a

profits of the UK property business, and

b

profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of that business.

5

In this paragraph “post-commencement accounting period” means an accounting period ending after the commencement date.