Corporation tax loss relief for carried-forward losses
Corporation tax loss relief for carried-forward losses

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Corporation tax loss relief for carried-forward losses
  • Main corporation tax loss relief reforms
  • The use of carried-forward losses prior to 1 April 2017
  • The use of carried-forward losses from 1 April 2017 onwards
  • Loss relaxation
  • Group relief for carried-forward losses
  • Corporate income loss restriction (CILR)
  • Deductions allowance
  • Limits on deductions
  • Specific industries
  • More...

Provisions in the Finance (No 2) Act 2017 (F(No 2)A 2017) made considerable reforms to the rules governing what companies can do with carried-forward corporation tax income losses. The reforms have resulted in two sets of rules on the use of these carried-forward losses—one for losses arising prior to 1 April 2017 and one for losses arising on or after 1 April 2017 (post-1 April 2017 losses). This Practice Note provides a summary of the rules that apply to post-1 April 2017 losses, which took effect from 1 April 2017. The rules are complex and detailed, so practitioners will need to consider the relevant parts of the legislation carefully in each case.

For information on the rules that apply in respect of pre-1 April 2017 losses, there is a summary below but for more information, see: Loss reliefs—overview. It is important to note that where pre-1 April losses are carried-forward to be set off against profits arising on or after 1 April 2017 (post-1 April 2017 profits), those pre-1 April 2017 losses are subject to the loss restriction introduced by F(No 2)A 2017 (discussed below).

This Practice Note looks at losses of an income or revenue nature. Losses that arise in the context of capital transactions are dealt with under the corporation tax on chargeable gains rules and are discussed in Practice Note: Capital losses

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