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On 27/11/2014, you requested the version in force on 27/11/2014 incorporating all amendments published on or before 27/11/2014. The closest version currently available is that of 13/08/2013.
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Deduction of unabsorbed losses and capital allowances
5.
—(1)  Any balance of the losses and capital allowances referred to in regulation 4 remaining unabsorbed on the day the financial institution or approved securities company permanently ceases to provide any approved syndicated offshore credit or underwriting facility or syndicated guarantee facility, or any syndicated offshore credit or guarantee facility to which the corresponding Regulations apply, shall be available as a deduction —
(a)
for the year of assessment which relates to the basis period in which the institution or company permanently ceases to provide such facility, against the following income of the institution or company and in the following order:
(i)
any income subject to tax at the rate of tax of 5%;
(ii)
any income subject to tax at a rate of tax other than 5% or the rate of tax specified in section 43(1)( a) of the Act;
(iii)
any income subject to tax at the rate of tax specified in section 43(1)(a) of the Act;
(b)
so far as the deduction cannot be allowed under sub-paragraph (a), for any subsequent year of assessment against any income of the institution or company referred to in sub-paragraph (a)(i), (ii) and (iii) and in the order specified therein.
(2)  Capital allowances may be deducted under paragraph (1) only if the financial institution or approved securities company continues to carry on the same trade or business in respect of the gains or profits of which the allowances falls to be made, and the allowances shall be disregarded if the institution or company has ceased to do so.
(3)  Section 37B of the Act shall apply to any deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the balance of losses and capital allowances available as a deduction under those sub-paragraphs were unabsorbed losses and capital allowances in respect of income subject to tax at the rate of tax of 5%.
(4)  Sections 23(4) to (8) and 37(12) to (17) of the Act shall apply, with the necessary modifications, to any deduction under paragraph (1)(a) or (b).
(5)  Where —
(a)
a deduction has been allowed under paragraph (1)(a) or (b) to a financial institution or an approved securities company for the year of assessment relating to any basis period (referred to in this paragraph as the initial basis period); and
(b)
the institution or company derives exempt income in any basis period subsequent to the initial basis period (referred to in this paragraph as the subsequent basis period),
then an amount equal to the lower of the following shall be deemed to be income derived by the institution or company in the subsequent basis period and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period:
(i)
the amount of the deduction allowed under paragraph (1)(a) or (b), less any amount or amounts deemed to be income of the institution or company by virtue of one or more earlier applications of this paragraph; and
(ii)
the amount of the exempt income derived in the subsequent basis period.
(5A)  Where —
(a)
a deduction has been allowed under paragraph (1)(a) or (b) to a financial institution or an approved securities company for the year of assessment relating to any basis period (referred to in this paragraph as the initial basis period);
(b)
the amount deducted consists of or includes bad debt, provision for doubtful debt or impairment loss; and
(c)
in any basis period subsequent to the initial basis period (referred to in this paragraph as the subsequent basis period), the bad debt or any part of it is recovered, the provision or any part of it is written back or the impairment loss or any part of it is reversed (such reversal being recognised under FRS 39),
then an amount equal to the lower of the following shall be deemed to be income derived by the institution or company in the subsequent basis period and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period:
(i)
the amount of the bad debt, provision for doubtful debt or impairment loss allowed as a deduction under paragraph (1)(a) or (b), less any amount or amounts deemed to be income of the institution or company by virtue of one or more earlier applications of this paragraph; and
(ii)
the amount of the bad debt so recovered, provision so written back or impairment loss so reversed.
(6)  In paragraph (5), “exempt income” means income that is exempt from tax under regulation 3(2), or regulation 4(1) of the corresponding Regulations.