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CTA10/S952

Computing the profits and losses of notional trades

»Ê¹ÚÌåÓýapp loss streaming rules (CTM06120) require a computation of the profits and losses of separate notional trades.

»Ê¹ÚÌåÓýapp losses and profits of those notional trades are worked out using normal taxation principles. CTA10/S952(1) simply provides that ‘just and reasonable apportionments are to be made of receipts, expenses, assets and liabilitiesâ€�. In some cases the apportionment can be made from branch or management accounts. Where there are no such accounts, apportionment should be made on any basis that produces a sensible result, for example apportionment by:

• time,
• sales,
• square footage, or
• production costs.

Apportionment affecting two or more companies

Apportionment of profits or losses under CTA10/S952 (1) can affect two or more companies, typically on the division of losses on the split of a trade. »Ê¹ÚÌåÓýapp effect of CTA10/S952 (2) and (3) is to ensure the same basis applies to all the affected companies.

In the event of a dispute all the companies concerned should be consulted and made aware of their opportunity to be heard by, or to make written representations to, the Tribunal.

»Ê¹ÚÌåÓýapp Tribunal determines an apportionment dispute as if it were an appeal.