Taxes Consolidation Act 1997 Schedule 32 paragraph 18

Relief in Respect of Corporation Profits Tax Losses

Paragraph 18 of Schedule 32 provided transitional relief for losses incurred under the former corporation profits tax regime, allowing those losses to be carried forward and set against corporation tax liabilities arising after the introduction of corporation tax on 6 April 1976.

• A "relevant deficiency" was the aggregate of corporation profits tax losses that could have been carried forward under the old rules, adjusted for certain reductions applied on the changeover to corporation tax.
• Relief was given against corporation tax sequentially, starting with the first accounting period for which the company was within the charge to corporation tax and continuing to later periods until the deficiency was fully relieved.
• For accounting periods from 1998 to 2002, the amount of relief was calculated using a formula incorporating transitional rates ranging from 17 per cent down to 1 per cent; from 1 January 2003, a simplified formula applied.
• Companies that had been exempt from income tax under Ireland–United Kingdom double taxation agreements were subject to separate set-off rules rather than the standard formula-based relief.