Trading losses and anti-avoidance

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Trading losses and anti-avoidance
  • Summary of trading losses anti-avoidance rules
  • Change in ownership and trading losses
  • Corporation tax loss refresh prevention rules
  • TAAR on corporate losses
  • Anti-avoidance and terminal losses

Summary of trading losses anti-avoidance rules

There are several anti-avoidance rules involving the utilisation of trading losses which are summarised below:

ConditionsConsequences
Major change in nature or conduct of trade of the company, or the company’s activities become small or negligibleTrading losses arising after the change in ownership cannot be relieved against profits arising before the change and losses carried forward cannot be relieved against trading profits or total profits.
Relief is lost completely.
See below
Post-1 April 2017 change in ownership and major change in the business of the companyLosses eligible for carried forward relief against total profits are not available against post-change of ownership profits, including terminal losses.
Relief is lost for five years.
See below
Post-1 April 2017 change in ownership, and:Trading losses available for carried forward relief, including terminal losses, are not available against the gain.
Relief is lost for gains within five years.
See Simon’s Taxes D1.1127 (subscription sensitive)
– no gain, no loss transfer within a group or tax neutral transfer of

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