Law

Corporation Tax Act 2010

United Kingdom · statute

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In force since 2026-03-18, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 1,852 provisions

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1,852 provisions

357JE Restriction on deductions

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357JF Availability of relief

(1) The reference in section 99(1)(a) (group relief: surrendering of losses and other amounts) to a trading loss is, where a company carrying on a trade in an accounting period has Northern Ireland losses of the trade or mainstream losses of the trade, a reference to those Northern Ireland losses or mainstream losses. (2) Section 100 (meaning of “trading loss”) has effect subject to subsection (1). (3) Where— (a) a company makes a claim for group relief under Part 5 in relation to a surrenderable amount that is a Northern Ireland loss, and (b) the profits against which the relief is claimed include some profits that are Northern Ireland profits and some that are not, the relief in relation to that surrenderable amount is given first, so far as possible, against the Northern Ireland profits. (4) Where— (a) a company makes a claim for group relief under Part 5 in relation to a surrenderable amount that is not a Northern Ireland loss, and (b) the profits against which the relief is claimed include some profits that are Northern Ireland profits and some that are not, the relief in relation to that surrenderable amount is given first, so far as possible, against the profits that are not Northern Ireland profits.

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357JG Restriction on deductions

(1) Subsection (2) applies where— (a) a company makes a claim for group relief under Part 5 in relation to a surrenderable amount that is a Northern Ireland loss (“the loss”), (b) the profits against which the relief is claimed include profits that are not Northern Ireland profits, and (c) at any time during the accounting period for which the relief is claimed (“the profit period”), the Northern Ireland rate is lower than the main rate. (2) In section 137(2) (amount of deduction)— (a) the reference in paragraph (a) to “an amount equal to” the surrendering company's surrenderable amounts is, so far as those surrenderable amounts comprise the loss, to the restricted deduction for the loss, as determined under section 357JJ (restricted deduction where Northern Ireland rate lower than main rate); (b) the reference in paragraph (b) to “an amount equal to” part of the surrendering company's surrenderable amounts is, so far as that part comprises the loss, to the restricted deduction for the loss, as determined under section 357JJ.

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357JH Modifications of Chapter 4 of Part 5

(1) Chapter 4 of Part 5 (claims for group relief) has effect, in relation to a claim under that Chapter in relation to surrenderable amounts that include a Northern Ireland loss, subject to the following provisions of this section. (2) In section 138 (limitation on amount of group relief applying to all claims)— (a) paragraphs (a) and (b) are treated as imposing separate limits; (b) the limit in paragraph (a) on the amount of group relief to be given on a claim has effect as a limit on the amount of losses and other surrenderable amounts in relation to which relief is to be given on the claim; (c) the limit in paragraph (b) on the amount of group relief to be given on a claim has effect as a limit on the amount of the deduction to be made as a result of the claim. (3) In section 139(6)(b) (unused part of the surrenderable amounts), and in section 141(2) so far as it applies in relation to section 139, references to the amount of group relief given on a claim are to the amount of losses and other surrenderable amounts in relation to which relief is given on the claim. (4) In section 140(6)(b) (unrelieved part of claimant company's available total profits), and in section 141(2) so far as it applies in relation to section 140, references to the amount of group relief given on a claim are to the amount of the deduction made as a result of the claim. (5) In section 143 (limitation on group relief where surrendering company owned by consortium), the limit in subsection (2) on the amount of group relief to be given on a claim has effect as a limit on the amount of losses and other surrenderable amounts in relation to which relief is to be given on the claim. (6) In section 144 (limitation on group relief where claimant company owned by consortium), the limit in subsection (2) on the amount of group relief to be given on a claim has effect as a limit on the amount of the deduction to be made as a result of the claim. (7) In section 146 (conditions 2 and 3: companies in link company's group), the limit in subsections (2) and (3) on the amount of group relief to be given on a claim has effect as a limit on the amount of the deduction to be made as a result of the claim. (8) In section 148 (conditions 1 and 2: surrendering company in group of companies), the reference in subsection (5) to the maximum amount of group relief that could be given has effect as a reference to the maximum amount of losses and other surrenderable amounts in relation to which relief could be given. (9) In section 149 (conditions 1 and 3: claimant company in group of companies), the reference in subsection (5) to the maximum amount of group relief that could be claimed by the claimant company has effect as a reference to the maximum amount of the deduction that could be made as a result of claims by the claimant company.

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357JHA Availability of relief

(1) The reference in section 188BB(1)(a) (group relief for carried-forward losses: surrendering of carried-forward losses and other amounts) to a loss carried forward to an accounting period of a company under section 45A(4) is, where a company has Northern Ireland losses or mainstream losses carried forward to an accounting period under that section, a reference to those Northern Ireland losses or mainstream losses. (2) Where— (a) a company makes a claim for group relief for carried-forward losses under Part 5A in relation to a surrenderable amount that is a Northern Ireland loss, and (b) the profits against which the relief is claimed include some profits that are Northern Ireland profits and some that are not, the relief in relation to that surrenderable amount is given first, so far as possible, against the Northern Ireland profits. (3) Where— (a) a company makes a claim for group relief for carried-forward losses under Part 5A in relation to a surrenderable amount that is not a Northern Ireland loss, and (b) the profits against which the relief is claimed include some profits that are Northern Ireland profits and some that are not, the relief in relation to that surrenderable amount is given first, so far as possible, against the profits that are not Northern Ireland profits.

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357JHB Restriction on deductions

(1) Subsection (2) applies where— (a) a company makes a claim for group relief for carried-forward losses under Part 5A in relation to a surrenderable amount that is a Northern Ireland loss (“the loss”), (b) the profits against which the relief is claimed include profits that are not Northern Ireland profits, and (c) at any time during the accounting period for which the relief is claimed (“the profit period”), the Northern Ireland rate is lower than the main rate. (2) In section 188CK(2) and (4) (amount of deduction)— (a) the reference in paragraph (a) to “an amount equal to” the surrendering company's surrenderable amounts is, so far as those surrenderable amounts comprise the loss, to the restricted deduction for the loss, as determined under section 357JJ (restricted deduction where Northern Ireland rate lower than main rate); (b) the reference in paragraph (b) to “an amount equal to” part of the surrendering company's surrenderable amounts is, so far as that part comprises the loss, to the restricted deduction for the loss, as determined under section 357JJ.

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357JHC Modifications of Chapter 4 of Part 5A

(1) Chapter 4 of Part 5A (limitations on group relief for carried-forward losses: claims under section 188CB) has effect, in relation to a claim under section 188CB in relation to surrenderable amounts that include a Northern Ireland loss, subject to the following provisions of this section. (2) In section 188DB(1) (limitation on amount of group relief for carried-forward losses applying to all claims under section 188CB)— (a) paragraphs (a) and (b) are treated as imposing separate limits; (b) the limit in paragraph (a) on the amount of group relief for carried-forward losses to be given on a claim under section 188CB has effect as a limit on the amount of losses and other surrenderable amounts in relation to which relief is to be given on the claim; (c) the limit in paragraph (b) on the amount of group relief for carried-forward losses to be given on a claim under section 188CB has effect as a limit on the amount of the deduction to be made as a result of the claim. (3) In section 188DC(6)(b) (unused part of the surrenderable amounts), and in section 188DF(2) so far as it applies in relation to section 188DC, references to the amount of group relief for carried-forward losses given on a claim are to the amount of losses and other surrenderable amounts in relation to which relief is given on the claim. (4) In section 188DE(4)(b) (previously claimed group relief for carried-forward losses), and in section 188DF(2) so far as it applies in relation to section 188DE, references to the amount of group relief for carried-forward losses given on a claim are to the amount of the deduction made as a result of the claim. (5) In section 188DH (limitation on group relief for carried-forward losses where claim under section 188CB is based on consortium condition 1), the limit in subsection (2) on the amount of group relief for carried-forward losses to be given on a claim has effect as a limit on the amount of the deduction to be made as a result of the claim. (6) In section 188DL (limitation on group relief for carried-forward losses where claim under section 188CB is made by member of a group of companies)— (a) the reference in subsection (3)(a) to the maximum amount of group relief for carried-forward losses that could be claimed by the claimant company has effect as a reference to the maximum amount of the deduction that could be made as a result of claims by the claimant company, and (b) the reference in subsection (3)(b) to the maximum amount of group relief under Part 5 that could be claimed by the claimant company has effect as a reference to the maximum amount of the deduction that could be made as a result of claims by the claimant company.

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357JHD Modifications of Chapter 5 of Part 5A

(1) Chapter 5 of Part 5A (limitations on group relief for carried-forward losses: claims under section 188CC) has effect, in relation to a claim under section 188CC in relation to surrenderable amounts that include a Northern Ireland loss, subject to the following provisions of this section. (2) In section 188EB(1) (limitation on amount of group relief for carried-forward losses applying to all claims under section 188CC)— (a) paragraphs (a), (b) and (c) are treated as imposing separate limits; (b) the limit in paragraph (a) on the amount of group relief for carried-forward losses to be given on a claim under section 188CC has effect as a limit on the amount of losses and other surrenderable amounts in relation to which relief is to be given on the claim; (c) the limits in paragraphs (b) and (c) on the amount of group relief for carried-forward losses to be given on a claim under section 188CC have effect as limits on the amount of the deduction to be made as a result of the claim. (3) In section 188EC(6) and (8)(b) (unused part of the surrenderable amounts attributable to the specified-loss making period), and in section 188EG(2) so far as it applies in relation to section 188EC, references to the amount of group relief for carried-forward losses given on a claim are to the amount of losses and other surrenderable amounts in relation to which relief is given on the claim. (4) In section 188EE(4)(b) (previously claimed group relief for carried-forward losses), and in section 188EG(2) so far as it applies in relation to section 188EE, references to the amount of group relief for carried-forward losses given on a claim are to the amount of the deduction made as a result of the claim. (5) In section 188EI (condition 4: companies in link company's group), the limit in subsections (2) and (3) on the amount of group relief for carried-forward losses to be given on a claim has effect as a limit on the amount of the deduction to be made as a result on the claim. (6) In section 188EK (condition 3 or 4: surrendering company in group of companies), the reference in subsection (4) to the maximum amount of group relief for carried-forward losses that could be given has effect as a reference to the maximum amount of losses and other surrenderable amounts in relation to which relief could be given.

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357JI Transfers of trade without a change of ownership

(1) This section applies where— (a) Chapter 1 of Part 22 (transfers of trade without a change of ownership) applies to the transfer of a trade, and (b) a loss made by the predecessor in the transferred trade is a Northern Ireland loss or a mainstream loss. (2) Sections 943A to 944C (which modify the application of Chapter 2 of Part 4) have effect as if the references in those sections to a loss made by the predecessor in the transferred trade were to the Northern Ireland loss or mainstream loss.

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357JJ Restricted deduction: Northern Ireland rate lower than main rate

(1) The amount of the restricted deduction for a Northern Ireland loss for the purposes of section 357JC(2) or (4), 357JG(2) or 357JHB(2) is the amount determined under subsection (2) or (3). (2) If the profit period falls within only one financial year, the amount of the restricted deduction for the loss is— (NIRMR×L1)+L2 where— NIR is the Northern Ireland rate in the financial year; MR is the main rate in the financial year; L1 is the amount of the loss that is unmatched; L2 is the amount of the loss (if any) that is matched. (3) If the profit period falls within more than one financial year, the amount of the restricted deduction for the loss is— X+L2 where— X is the amount of the loss that is unmatched (“the unmatched loss”), adjusted in accordance with subsection (4); L2 is the amount of the loss (if any) that is matched. (4) To adjust the unmatched loss for the purposes of subsection (3), take the following steps— Step 1 Apportion the unmatched loss between the financial years on a time basis according to the respective lengths of the parts of the profit period falling within those years. Step 2 Where an amount is apportioned under step 1 to a financial year in which the Northern Ireland rate is lower than the main rate, reduce that amount by multiplying it by the following fraction— NIRMR where— NIR is the Northern Ireland rate for the financial year; MR is the main rate for the financial year. Step 3 Add together each amount reduced under step 2 and each amount apportioned under step 1 but not reduced under step 2. (5) For the purposes of this section— (a) an amount of a loss is “matched” if relief in relation to the loss is given against Northern Ireland profits, and (b) an amount of a loss is “unmatched” if relief in relation to the loss is given against profits that are not Northern Ireland profits. (6) In this section “the loss” and “the profit period” have the meanings given by section 357JC(1) or (3), 357JG(1) or 357JHB(1) (as the case may be).

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357K Application of Chapter

The definitions in this Chapter apply for the purposes of this Part.

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357KA “Northern Ireland company”

(1) A company is a “Northern Ireland company” in an accounting period if— (a) the company carries on a qualifying trade in the period, and (b) the SME (Northern Ireland employer) condition, the SME (election) condition or the large company condition is met. (2) The “ SME (Northern Ireland employer) condition ” is that the company— (a) is an SME in relation to the period, and (b) is a Northern Ireland employer in relation to the period. (2A) The “SME (election) condition” is that— (a) the company is an SME in relation to the period, (b) the company is not a Northern Ireland employer in relation to the period, (c) the company has a NIRE in the period, (d) the company is not a disqualified close company in relation to the period, and (e) an election by the company for the purposes of this subsection has effect in relation to the period. (3) The “large company condition” is that the company— (a) is not an SME in relation to the period, and (b) has a NIRE in the period. (3A) An election for the purposes of subsection (2A)— (a) must be made by notice to an officer of Revenue and Customs, (b) must specify the accounting period in relation to which it is to have effect (“the specified accounting period”), (c) must be made before the end of the period of 12 months beginning with the end of the specified accounting period, and (d) if made in accordance with paragraphs (a) to (c) has effect in relation to the specified accounting period. (4) For the meaning of— “qualifying trade”, see section 357KB; “SME”, see section 357KC; “Northern Ireland employer”, see section 357KD; “disqualified close company”, see section 357KEA; “NIRE”, see Chapter 5.

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357KB “Qualifying trade”

(1) “Qualifying trade” means a trade carried on by a company (otherwise than in partnership) where— (a) the company is within the charge to corporation tax in relation to the trade, and (b) the trade is not an excluded trade. (2) If an election by a company for the purposes of this subsection has effect, “qualifying trade” also includes a trade carried on by the company (otherwise than in partnership) where— (a) the trade is an excluded trade within— (i) section 357XB (lending and investment), (ii) section 357XC (investment management), or (iii) section 357XE (re-insurance trade), and (b) the trade includes any back-office activities. (3) An election for the purposes of subsection (2)— (a) must be made by notice to an officer of Revenue and Customs, (b) must specify the first accounting period (“the specified accounting period”) in relation to which it is to have effect, (c) must be made before the end of the period of 12 months beginning with the end of the specified accounting period, and (d) if made in accordance with paragraphs (a) to (c)— (i) has effect in relation to the specified accounting period and subsequent accounting periods, and (ii) is irrevocable. (4) For the meaning of “excluded trade”, and for power to make provision about the meaning of “back-office activities”, see Chapter 17.

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357KC “SME”

(1) A company is an “SME” in relation to an accounting period if the company is a micro, small or medium-sized enterprise as defined in the Annex— (a) in that accounting period, or (b) in each accounting period any part of which falls within the period of 12 months preceding that accounting period. (2) In this section “the Annex” means the Annex to Commission Recommendation No 2003/361/EC of 6 May 2003. (3) For the purposes of this Part the Annex has effect with the following modifications. (4) Where any enterprise is in liquidation or administration, the rights of the liquidator or administrator (in that capacity) are to be left out of account when applying Article 3(3)(b) in determining for the purposes of this Part whether— (a) that enterprise, or (b) any other enterprise (including that of the liquidator or administrator), is an SME. (5) Article 3 has effect as if paragraph 5 (declaration in good faith where control cannot be determined etc) were omitted. (6) In Article 4, the first sentence of paragraph 1 has effect as if the data to apply to— (a) the headcount of staff, and (b) the financial amounts, were the data relating to the accounting period or periods mentioned in subsection (1) above (instead of the period referred to in that sentence) and calculated on an annual basis. (7) Article 4 has effect as if the following provisions were omitted— (a) in paragraph 1, the second sentence (data to be taken into account from date of closure of accounts); (b) paragraph 2 (no change of status unless enterprise's change of size sustained over two consecutive periods); (c) paragraph 3 (genuine estimate in case of newly established enterprise).

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357KD “Northern Ireland employer”

A company is a “Northern Ireland employer” in relation to an accounting period if the Northern Ireland workforce conditions are met— (a) in relation to that accounting period, or (b) in relation to the period of 12 months preceding that accounting period.

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357KE Northern Ireland workforce conditions

(1) The Northern Ireland workforce conditions, in relation to a period, are— (a) that 75% or more of the working time that is spent in the United Kingdom during the period by members of the company's workforce is spent in Northern Ireland, and (b) that 75% or more of the company's workforce expenses that are attributable to working time spent in the United Kingdom during the period by members of the company's workforce are attributable to time spent in Northern Ireland. (2) References in this section to members of the company's workforce are to— (a) directors of the company, (b) employees of the company, ... (c) externally provided workers in relation to the company, and (d) in the case of a close company, or of a company which would be a close company if it were UK resident, individuals who are participators in the company. (3) In subsection (2) “externally provided worker”, in relation to a company, has the same meaning as in Part 13 of CTA 2009 (see section 1128 of that Act). (4) References in this section to the working time spent by members of the company's workforce in a place are to the total time spent by those persons in that place while providing services to the company. (5) The reference in subsection (1)(b) to “the company's workforce expenses” is, where the period is an accounting period of the company, to the total of the deductions made by the company in the period in respect of members of the workforce in calculating the profits of any trade carried on by the company. (6) The reference in subsection (1)(b) to “the company's workforce expenses” is, where the period is not an accounting period of the company, to the total of— (a) the deductions made by the company in any accounting period falling wholly within the period, and (b) the appropriate proportion of the deductions made by the company in any accounting period falling partly within the period, in respect of members of the workforce in calculating the profits of any trade carried on by the company. (7) For the purposes of subsection (6)(b), “the appropriate proportion” is to be determined by reference to the number of days in the periods concerned. (7A) In this section “participator” has the same meaning as in sections 1064 to 1067 (see sections 1068 and 1069). (7B) In determining for the purposes of this section the amount of working time that is spent in any place by a participator in the company, time spent by the participator in that place is to be included where— (a) the time is spent by the participator in providing services to a person other than the company (“the third party”), and (b) condition A or B is met. (7C) Condition A is that the provision of the services results in a payment being made (whether directly or indirectly) to the company by— (a) the third party, or (b) a person connected with the third party. (7D) Condition B is that— (a) the company holds a right that it acquired (whether directly or indirectly) from the participator, and (b) any payment in connection with that right is made (whether directly or indirectly) to the company by— (i) the third party, or (ii) a person connected with the third party. (7E) Section 1122 (connected persons) applies for the purposes of this section. (8) The Commissioners for Her Majesty's Revenue and Customs may by regulations specify descriptions of deduction that are, or are not, to be regarded for the purposes of this section as made in respect of members of a company's workforce. (9) Regulations under this section— (a) may make different provision for different purposes; (b) may make incidental, supplemental, consequential and transitional provision and savings.

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357KEA “Disqualified close company”

(1) A company is a “disqualified close company” in relation to a period if— (a) the company is a close company, or would be a close company if it were UK resident, at any time in the period, and (b) conditions A and B are met. (2) Condition A is that the company has a NIRE in the period as a result of tax-avoidance arrangements. (3) Condition B is that— (a) 50% or more of the working time that is spent in the United Kingdom during the period by members of the company's workforce is working time spent by participators in the company otherwise than in Northern Ireland, or (b) 50% or more of the company's workforce expenses that are attributable to working time spent in the United Kingdom during the period by members of the company's workforce are attributable to working time spent by participators in the company otherwise than in Northern Ireland. (4) For the purposes of this section “tax avoidance arrangements” means arrangements the sole or main purpose of which is to secure that any profits or losses of the company for the period are Northern Ireland profits or losses. (5) In subsection (4) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (6) The following provisions apply for the purposes of this section as they apply for the purposes of section 357KE (Northern Ireland workforce conditions)— (a) subsections (2) to (5) and (7A) to (7E) of that section; (b) regulations made under that section. (7) In its application by virtue of subsection (6), subsection (5) of section 357KE has effect as if the reference in it to subsection (1)(b) of that section were to subsection (3)(b) of this section.

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357L Northern Ireland regional establishments of companies

(1) A company has a Northern Ireland regional establishment (referred to in this Part as a “NIRE”) if (and only if)— (a) the company has a fixed place of business in Northern Ireland through which the business of the company is wholly or partly carried on, or (b) an agent acting on behalf of the company has and habitually exercises in Northern Ireland authority to do business on behalf of the company. (2) For this purpose a “fixed place of business” includes (without prejudice to the generality of that expression)— (a) a place of management, (b) a branch, (c) an office, (d) a factory, (e) a workshop, (f) an installation or structure for the exploration of natural resources, (g) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources, and (h) a building site or construction or installation project. (3) Subsection (1) is subject to sections 357LA and 357LB.

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357LA Agent of independent status

(1) A company is not regarded as having a NIRE by reason of the fact that it carries on business in Northern Ireland through an agent of independent status acting in the ordinary course of the agent's business. (2) Sections 357LC to 357LI apply for the purpose of supplementing subsection (1) in relation to transactions carried out on behalf of a company by a person in Northern Ireland acting as— (a) a broker (section 357LC), (b) an investment manager (sections 357LD to 357LH), or (c) a members' or managing agent at Lloyd's (section 357LI).

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357LB Alternative finance arrangements

(1) Subsection (2) applies if alternative finance return is paid to a company. (2) The company is not regarded as having a NIRE merely by virtue of anything done for the purposes of the alternative finance arrangements— (a) by the other party to the arrangements, or (b) by any other person acting for the company in relation to the arrangements. (3) In subsection (1) “alternative finance return” means alternative finance return within the application of— (a) section 564I, 564K or 564L(2) or (3) of ITA 2007, or (b) section 511, 512 or 513(2) or (3) of CTA 2009. (4) In subsection (2) the reference to “the alternative finance arrangements” is a reference to the alternative finance arrangements under which the alternative finance return mentioned in subsection (1) is paid.

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357LC The independent broker condition

(1) This section applies if a transaction is carried out on behalf of a company in the course of the company's trade by a person in Northern Ireland acting as a broker. (2) In relation to the transaction, the broker is regarded for the purposes of section 357LA(1) as an agent of independent status acting in the ordinary course of the broker's business if (and only if) each of conditions A to D is met. (3) Condition A is that at the time of the transaction the broker is carrying on the business of a broker. (4) Condition B is that the transaction is carried out in the ordinary course of that business. (5) Condition C is that the remuneration which the broker receives in respect of the transaction for the provision of the services of a broker to the company is not less than is customary for that class of business. (6) Condition D is that the broker does not fall (apart from this subsection) to be treated as a NIRE of the company in relation to any other transaction of any kind carried out in the same accounting period of the company as the transaction in question.

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357LD The independent investment manager conditions

(1) This section applies if an investment transaction is carried out on behalf of a company in the course of the company's trade by a person in Northern Ireland acting as an investment manager. (2) In relation to the investment transaction, the circumstances in which the investment manager is regarded for the purposes of section 357LA(1) as an agent of independent status acting in the ordinary course of the investment manager's business include where each of conditions A to E is met (“the independent investment manager conditions”). (3) Condition A is that at the time of the transaction the investment manager is carrying on a business of providing investment management services. (4) Condition B is that the transaction is carried out in the ordinary course of that business. (5) Condition C is that, when the investment manager acts on behalf of the company in relation to the transaction, the relationship between them, having regard to its legal, financial and commercial characteristics, is a relationship between persons carrying on independent businesses dealing with each other at arm's length. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) Condition E is that the remuneration which the investment manager receives in respect of the transaction for the provision of investment management services to the company is not less than is customary for that class of business.

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357LE Investment managers: the 20% rule

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357LF Section 357LE: interpretation

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357LG Application of 20% rule to collective investment schemes

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357LH Meaning of “investment manager” and “investment transaction”

In this Chapter “investment manager” and “investment transaction” have the same meanings as in Chapter 2 of Part 24 (see section 1150).

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357LI Lloyd's agents

(1) This section applies if a transaction is carried out on behalf of a company in the course of the company's trade by a person in Northern Ireland acting as a members' agent or managing agent at Lloyd's. (2) In relation to the transaction, the person is regarded for the purposes of section 357LA(1) as an agent of independent status acting in the ordinary course of the person's business if conditions A, B and C are met. (3) Condition A is that the company is a member of Lloyd's. (4) Condition B is that the transaction is carried out in the course of the company's underwriting business. (5) Condition C is that the person acting on behalf of the company in relation to the transaction acts as members' agent or as managing agent of the syndicate in question. (6) For the purposes of this section— (a) a company is a member of Lloyd's if it is a corporate member within the meaning of Chapter 5 of Part 4 of FA 1994; (b) “members' agent” and “managing agent” are to be read in accordance with section 230 of that Act.

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357LJ Investment managers: disregard of certain chargeable profits

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357LK Miscellaneous

(1) For the purposes of this Chapter a person is regarded as carrying out a transaction on behalf of another if the person— (a) undertakes the transaction, whether on behalf of or to the account of the other, or (b) gives instructions for it to be so carried out by another. (2) In the case of a person who acts as a broker or investment manager as part only of a business, this Chapter has effect as if that part were a separate business.

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357M Introductory

(1) This Chapter applies to a company that is a Northern Ireland company in an accounting period by virtue of the SME (Northern Ireland employer) condition in section 357KA. (2) In this Chapter— (a) a reference to “the company” or “the accounting period” is to the company or accounting period mentioned in subsection (1); (b) a reference to “the trade” is to any qualifying trade carried on by the company in the period. (3) Section 357MA contains provision under which profits or losses of the trade for the accounting period are— (a) Northern Ireland profits or losses of the trade, (b) mainstream profits or losses of the trade, or (c) a combination of— (i) profits or losses within paragraph (a), and (ii) profits or losses within paragraph (b). (4) Further provision under which profits or losses of the trade may be Northern Ireland profits or losses of the trade, or mainstream profits or losses of the trade, is contained in— (a) Chapters 8 to 15 of this Part, and (b) CAA 2001 (see section 6E of that Act). (5) This Chapter has effect for the purposes of this Part.

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357MA Northern Ireland profits or losses and mainstream profits or losses

(1) Where the trade is a qualifying trade by virtue of section 357KB(1) (trade other than excluded trade), the profits or losses of the trade for the accounting period are Northern Ireland profits or Northern Ireland losses of the trade for the period to the extent that they do not arise from an excluded activity. (2) Subsection (1)— (a) does not apply in relation to any profits or losses of the trade that form part of the Northern Ireland profits or losses of the trade by virtue of any provision apart from this section, and (b) is subject to any provision apart from this section under which profits or losses of the trade are mainstream profits or losses of the trade. (3) Where the trade is a qualifying trade by virtue of section 357KB(2) (excluded trade with back-office activities), the profits, if any, determined under section 357MB as back-office profits of the trade for the accounting period are Northern Ireland profits of the trade for the period. (4) The profits or losses of the trade for the accounting period are mainstream profits or mainstream losses of the trade for the period to the extent that they are not Northern Ireland profits or Northern Ireland losses by virtue of subsection (1) or (3) or any provision apart from this section. (5) Subsection (4) does not apply in relation to any profits or losses of the trade that form part of the mainstream profits or losses of the trade by virtue of any provision apart from this section.

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357MB Profit imputed to back-office activities

(1) To determine for the purposes of section 357MA(3) the back-office profits of the qualifying trade for the accounting period, take the following steps— Step 1 Multiply each back-office deduction by the relevant percentage. Step 2 Add together each amount calculated under step 1. (2) In subsection (1)— “back-office deduction” means a deduction— to which the company is entitled in calculating the profits of the trade for the period, and which is in respect of back-office activities; “the relevant percentage” means 5%. (3) The Treasury may by regulations amend subsection (2) so as to substitute a different percentage for the percentage for the time being specified there. (4) Regulations under this section— (a) may make different provision for different purposes (including, in particular, different trades or different back-office activities); (b) may make incidental, supplemental, consequential and transitional provision and savings.

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357N Introductory

(1) This Chapter applies to a company that is a Northern Ireland company in an accounting period by virtue of the SME (election) condition or the large company condition in section 357KA. (2) In this Chapter— (a) a reference to “the company” or “the accounting period” is to the company or accounting period mentioned in subsection (1); (b) a reference to “the trade” is to any qualifying trade carried on by the company in the period. (3) Section 357NA contains provision under which profits or losses of the trade for the accounting period are— (a) Northern Ireland profits or losses of the trade, (b) mainstream profits or losses of the trade, or (c) a combination of— (i) profits or losses within paragraph (a), and (ii) profits or losses within paragraph (b). (4) Further provision under which profits or losses of the trade may be Northern Ireland profits or losses of the trade, or mainstream profits or losses of the trade, is contained in— (a) Chapters 8 to 15 of this Part, and (b) CAA 2001 (see section 6E of that Act). (5) This Chapter has effect for the purposes of this Part.

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357NA Northern Ireland profits or losses and mainstream profits or losses

(1) Where the trade is a qualifying trade by virtue of section 357KB(1) (trade other than excluded trade), the profits or losses of the trade for the accounting period are Northern Ireland profits or Northern Ireland losses of the trade for the period to the extent that they— (a) do not arise from an excluded activity, (b) arise directly or indirectly through or from the company's NIRE, or from property or rights used by, or held by, or for, the company's NIRE, and (c) are attributable to the company's NIRE. (2) Subsection (1)— (a) does not apply in relation to any profits or losses of the trade that form part of the Northern Ireland profits or losses of the trade by virtue of any provision apart from this section, and (b) is subject to any provision apart from this section under which profits or losses of the trade are mainstream profits or losses of the trade. (3) Where the trade is a qualifying trade by virtue of section 357KB(2) (excluded trade with back-office activities), the profits, if any, determined under section 357NB as Northern Ireland back-office profits of the trade for the accounting period are Northern Ireland profits of the trade for the period. (4) The profits or losses of the trade for the accounting period are mainstream profits or mainstream losses of the trade for the period to the extent that they are not Northern Ireland profits or Northern Ireland losses by virtue of subsection (1) or (3) or any provision apart from this section. (5) Subsection (4) does not apply in relation to any profits or losses of the trade that form part of the mainstream profits or losses of the trade by virtue of any provision apart from this section. (6) Sections 357NC to 357NI contain provision for determining the amount of profits or losses of a trade that are attributable to the company's NIRE. (7) See also section 357LJ (investment managers: disregard of certain chargeable profits), which provides for profits of certain investment transactions to be disregarded in determining the amount of profits attributable to a NIRE.

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357NB Profit imputed to Northern Ireland back-office activities

(1) To determine for the purposes of section 357NA(3) the Northern Ireland back-office profits of the trade for the accounting period, take the following steps— Step 1 Multiply each Northern Ireland back-office deduction by the relevant percentage. Step 2 Add together each amount calculated under step 1. (2) In subsection (1)— “Northern Ireland back-office deduction” means a deduction— to which the company is entitled in calculating the profits of the trade for the period, and which is in respect of back-office activities carried on in Northern Ireland; “the relevant percentage” means 5%. (3) The Treasury may by regulations amend subsection (2) so as to substitute a different percentage for the percentage for the time being specified there. (4) Regulations under this section— (a) may make different provision for different purposes (including, in particular, different trades or different back-office activities); (b) may make incidental, supplemental, consequential and transitional provision and savings.

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357NC The separate enterprise principle

(1) The profits of the company that are attributable to its NIRE are those that the NIRE would have made if it were a distinct and separate enterprise which— (a) engaged in the same or similar activities under the same or similar conditions, and (b) dealt wholly independently with the company. (2) In applying subsection (1) it is to be assumed that— (a) the NIRE has the same credit rating as the company, and (b) the NIRE has such equity and loan capital as it could reasonably be expected to have in the circumstances specified in that subsection. (3) In this Chapter the principle in subsection (1) (read with subsection (2)) is called “the separate enterprise principle”.

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357ND Transactions treated as being on arm's length terms

In accordance with the separate enterprise principle, transactions between the company's NIRE and any other part of the company are treated as taking place on such terms as would have been agreed between parties dealing at arm's length.

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357NE Provision of goods or services for NIRE

(1) This section applies if the company provides its NIRE with goods or services. (2) If the goods or services are of a kind that the company supplies, in the ordinary course of business, to third parties dealing with it at arm's length, the matter is dealt with as a transaction to which the separate enterprise principle applies. (3) If not, the matter is dealt with as an expense incurred by the company for the purposes of its NIRE (see section 357NF).

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357NF Allowable deductions

(1) A deduction is allowed in calculating the profits attributable to the company's NIRE for any allowable expenses incurred for the purposes of the NIRE. (2) Expenses incurred for the purposes of the NIRE include executive and general administrative expenses so incurred, whether in Northern Ireland or elsewhere. (3) It does not matter whether the expenses are incurred by, or reimbursed by, the NIRE. (4) The amount of expenses to be taken into account under subsection (1) is the actual cost to the company. (5) “Allowable expenses”, means expenses of a kind in respect of which a deduction is allowed for corporation tax purposes or (in the case of a company that is not UK-resident) would be so allowed if incurred by a UK resident company.

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357NG Deductions attributable to the NIRE for costs

A deduction is allowed in calculating the profits attributable to the company's NIRE for any costs that would have been incurred on the assumptions in section 357NC(2).

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