In order to quantify the loss eligible for relief, the foreign
loss is to be recomputed in accordance with UK principles, (
CTM81560).
To enable the recomputation to be carried out, the extended
rules require assumptions to be made about the surrendering
company. One of those assumptions relates to the accounting period.
It is assumed that an accounting period for UK CT purposes
begins at the start of the loss period.
In the following paragraphs a reference to a ‘loss
period’ is to be read as a reference to the period defined by
the rules of the relevant European Economic Area (EEA) territory
for which the EEA tax loss is computed. This could be an accounting
period, a tax return period or some other period where these are
coincident.
The deemed accounting period for the purposes of the
recomputation ends on the earlier of:
Where the deemed accounting period ends on the former of the
above dates it is assumed that a further accounting period begins
when the previous deemed accounting period ends.
That further deemed accounting period ends on the earlier
of:
Where the deemed accounting period/periods of the surrendering company does/do not coincide with those of the claimant company, the normal apportionment rules at ICTA88/S403A – S403B apply as they would to UK only groups, ( CTM80215).
