Taxes Consolidation Act 1997 Schedule 32 paragraph 16

Relief in Respect of Unrelieved Losses and Capital Allowances: Carried Forward from the Year 1975–76

Paragraph 16 of Schedule 32 provided transitional relief from corporation tax for companies that had unrelieved income tax trading losses and unrelieved capital allowances carried forward from years before the introduction of corporation tax on 6 April 1976.

• Companies that had trading losses or unused capital allowances from the income tax era (before 6 April 1976) could claim relief against their corporation tax liability at specified declining rates.
• The relief operated by reducing the corporation tax payable for each accounting period, and was capped at the net trade income for that period after deducting trade-related charges on income.
• The rates of relief declined from 17 per cent for accounting periods in 1998 to 1 per cent for accounting periods in 2002, reflecting the narrowing gap between the standard corporation tax rate and the 15 per cent rate used for corporation profits tax loss relief.
• No relief was available for accounting periods beginning on or after 1 January 2003, as the standard corporation tax rate from that date fell below 15 per cent.