The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
When a company’s debits on its non-trading loan relationships and derivative contracts in an accounting period exceed the credits on its non-trading loan relationships and derivative contracts in the same period (the deficit period), the surplus is a special category of loss which is known as an NTD.
This guidance note considers how companies can utilise their NTDs.
For guidance on determining a company’s debits and credits from loan relationships and whether these are trading or non-trading, see the Taxation of loan relationships guidance note.
Companies can claim for NTDs to be offset against other profits of the same period. Prior to 1 April 2017, the relief was given after the automatic set off of any trading losses brought forward but this is no longer the case with the relaxation in the utilisation of trading losses brought forward against total profits post-1 April 2017 (see Trading losses carried forward). Relief for the NTD is given in priority to current year trading losses, property losses, trading losses carried back from a later period and loan relationship deficits carried back from a later period.
The claim can specify all or part of the NTD to be offset.
See Example 1, which is taken from CFM32060.
NTDs of the current period can be offset against profits of any description (except ring fence profits) but the claim must identify which profits are being offset. Usually this requirement is met automatically by tax computation schedules generated by tax return software. The deadline for the claim is within two years of the end of the deficit period, ie one year after the normal filing date.
A company can carry back any surplus
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