Taxes Consolidation Act 1997 section 398

Computation of losses attributable to exemption of income from certain securities

Section 398 adjusts the computation of trading losses for companies operating in Ireland through a branch or agency, by requiring that income from Government-backed securities be included as a trading receipt when determining whether a branch loss has arisen.

• The section applies to foreign companies carrying on a trade in Ireland through a branch or agency, and modifies the loss relief rules in sections 396 and 397.
• Interest and other profits from securities held by or for the branch must be treated as trading receipts when computing branch losses, even if those amounts were originally excluded from tax under sections 43, 49 and 50.
• This prevents a branch from claiming loss relief that arose only because Government securities income was omitted from the trading computation — the branch loss is reduced accordingly.
• The recomputation applies wherever a loss would otherwise be set off against trading income or profits (of that company or any other), or would be treated as arising in an accounting period.

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