The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Trading losses can be offset against total profits of the same period. Total profits covers, for example, chargeable gains or non-exempt dividends.
The maximum claim for relief is the lower of the available loss or the available profit. In other words, no partial claims are allowed and the claim must either use all of the loss, or eliminate all of the available profits.
See Example 1.
Once trading losses have been relieved against profits of the same period in which the loss was generated, a claim may also be made under CTA 2010, s 37(3)(b) to carry back any remaining loss against profits of the preceding 12 months. This is explained in more detail below.
Relief for losses against current or preceding year profits is not allowed in certain circumstances, as follows:
the losses are incurred in carrying on a trade outside the UK
the loss is incurred in a trade which is not carried out on a commercial basis with a view to the realisation of profits
the loss is incurred in a trade of farming or market gardening which has incurred losses in the previous five years
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