Commentary

D1.1106 Carry forward relief for trading losses—post 1 April 2017

Corporate tax
Corporate tax | Commentary

D1.1106 Carry forward relief for trading losses—post 1 April 2017

Corporate tax | Commentary

D1.1106 Carry forward relief for trading losses—post 1 April 2017

The tax treatment of losses carried forward were reformed by Finance Act 20171, with the aim of providing more flexibility in the relief of losses arising on or after 1 April 2017. HMRC guidance is at CTM04840.

Qualifying post 1 April 2017 trading losses carried forward

Where a company makes a trading loss in an accounting period which begins on or after 1 April 2017, the trading losses can be carried forward for offset against the company's total profits of a later accounting period provided that the company continues to trade in the next accounting period, the loss has not been relieved against current year profits or previous year profits or group relieved and it does not fall within any of the 'Restricted losses' summarised below2.

Losses carried forward under these provisions are also eligible for group relief under the group relief for carried forward losses provisions, see D2.234 for details.

There is also a restriction on the amount of profits against which the brought forward losses can be offset which is broadly, where profits exceed £5 million, only 50% of these profits are available for offset, see D1.1108B for further details.

Where losses are carried forward for offset against future total profits, the company may make a claim to use the losses against its total profits of the later period as specified in the claim. The claim can specify all or part of the

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