Taxes Consolidation Act 1997 section 396C

Relief from corporation tax for losses of participating institutions

Section 396C restricts the amount of carried-forward trading losses that NAMA-participating banks can offset against trading income in any accounting period. Note: this section applied only from 22 November 2009 to 31 December 2013 and is now spent.

• As NAMA-participating banks returned to profitability, this section limited the extent to which their carried-forward losses could shelter trading income, preventing the full taxpayer-funded bailout from also generating large tax reliefs.
• The maximum losses that a participating institution can offset in any period is capped at its "relevant limit", which is its proportionate share of 50% of the group's net trading income (the "relevant amount").
• Where a participating institution cannot fully use its own capped losses due to insufficient income, it may surrender the excess to a group company that can absorb them, subject to that company's own relevant limit.
• The section applies only to Irish-resident companies and Irish branches of non-resident companies, and claims must be made within two years of the end of the relevant accounting period.

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