Commentary on Sections Chapter 2: Transfers Relating to Nuclear Undertakings Section 44: Extinguishment of BNFL losses for tax purposes
164.The accumulated losses in BNFL companies that have built up over time largely arise, one way or another, from provisions made in BNFL’s accounts for decommissioning and clean-up. These losses will be extinguished when the NDA takes responsibility for decommissioning and clean-up under section 21. Under section 29 the credits BNFL will recognise in its accounts when the NDA takes responsibility are exempted from tax. As a quid pro quo section 44 extinguishes the tax losses of BNFL and its subsidiaries.
165.Subsection (1) extinguishes losses in BNFL companies for accounting periods beginning on or after the trigger date, which is defined in subsection (4).
166.Subsection (2) lists the various sorts of tax losses which are extinguished by this section.
167.Subsection (3) restricts the application of this section to publicly owned BNFL companies. This is because the extinguishment, like the tax disregard in section 29, is focussed on and to facilitate the reorganisation of the responsibility for nuclear decommissioning and clean-up within the public sector.
168.Subsection (4) sets out definitions, including that of “trigger date”, which is the earlier of the date when the NDA takes financial responsibility under section 21 of a BNFL site and the date when property etc of a BNFL company is transferred to the NDA or a subsidiary of the NDA in accordance with a nuclear transfer scheme authorised by section 39.
169.Subsection (5) ties this section to the corporation tax legislation.