(1) Section 420 of the Principal Act is amended by the substitution for subsection (1) of the following:
"(1) Where in any accounting period the surrendering company has incurred a loss, computed as for the purposes of section 396(2), in carrying on a trade in respect of which the company is within the charge to corporation tax, the amount of the loss may be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period; but this subsection shall not apply -
(a) to so much of a loss as is excluded from section 396(2) by section 396(4) or 663, or
(b) so as to reduce the profits of a claimant company which carries on life business (within the meaning of section 706) by an amount greater than the amount of such profits (before a set off under this subsection) computed in accordance with Case I of Schedule D and section 710(1).".
(2) This section shall be deemed to have applied as respects accounting periods commencing
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