OT21204 - Corporation Tax Ring Fence: The Supplementary Charge: The meaning of “Adjusted Ring Fence Profits”

CTA10\S330(2), CTA10\S330(3)

The supplementary charge is levied on a company’s adjusted ring fence profits. These are defined in CTA10\S330(2) & (3) as a company’s ordinary ring fence CT profits subject to the assumption that financing costs (see OT21206) are left out of account

• in computing the company’s own profits, or,
• for the purpose of computing adjusted ring fence profits only, in computing the amount of any loss relief surrendered to the company by way of group relief.

For the purposes of calculating the supplementary charge, adjusted ring fence profits can be reduced by onshore allowance (OT21500), investment allowance and cluster area allowance.