In an accounting period in which a company ceases to trade both trading losses realised in the accounting period of cessation and carried forward trading losses which are carried forward into the cessation period (see D1.1106 and D1.1108) can be carried back for offset against previous year's profits if not relieved in the period of cessation1. See further details of these two reliefs below.
Where only a part of a trade is discontinued, the provisions do not apply in respect of that part which has been discontinued unless it is a separate trade, see Electronics Ltd2 where it was held that relief was not available for losses on the closure of two divisions of a wholly-owned subsidiary of a company operating on a global basis. The Special Commissioners decided that the company carried on a single trade which had not ceased. The question of whether there was one or more trades turned on the level of generality of the description of the trade, and in this particular case the Commissioners decided it would be a mistake
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