Taxes Consolidation Act 1997 section 455

Restriction of certain losses

Section 455 restricts how a manufacturing company may use a trading loss attributable to its 10%-taxed activity, requiring that part of the loss to be matched against income from the 10%-taxed activity rather than relieved against other income.

• Defines a "loss from the sale of goods" as the part of a trading loss referable to the manufacturing activity that qualified for the 10 per cent rate of corporation tax.
• Reduces the trading loss available for relief under section 396(2) (and later section 396A(2)) by the loss from the sale of goods, so that part cannot shelter non-manufacturing profits.
• Allows the company to claim the loss from the sale of goods against its income from the sale of goods in the current accounting period and in earlier periods of equal length.
• Carves out losses arising from certain capital allowances on pre-1992 IDA-approved projects and on Shannon-certified trading operations; the section ceased to have effect from 1 January 2003.