Commentary

D7.458 Ring-fencing of losses – Restricted relief for BLAGAB losses

Corporate tax
Corporate tax | Commentary

D7.458 Ring-fencing of losses – Restricted relief for BLAGAB losses

Corporate tax | Commentary

D7.458 Ring-fencing of losses – Restricted relief for BLAGAB losses

The more complicated ring-fence follows a statutory method for calculating what part of a company's BLAGAB losses may be set against its non-BLAGAB gains.

The first step is that BLAGAB losses may be set off only against the excess of the non-BLAGAB gains over any non-BLAGAB losses accruing in the accounting period plus any non-BLAGAB losses of earlier accounting periods so far as those losses have not been relieved in an earlier accounting period1. In other words the company must first reduce its non-BLAGAB gains by non-BLAGAB allowable losses rather than carrying those losses forward.

Having determined what non-BLAGAB gains may potentially be relieved by BLAGAB

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