Summary of reliefs for company losses

By Tolley

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

  • Summary of reliefs for company losses
  • Trading losses
  • Non-trading loan relationship deficits
  • Non-trading losses on intangible fixed assets
  • UK property business losses

A company may incur any of the following losses:

  • trading losses
  • non-trading loan relationship losses
  • non-trading losses on intangible fixed assets
  • property losses

These losses are generally able to be offset against certain profits either in the year the loss was incurred, previous or future years. The rules governing such offset are similar for each loss source but there are nuances and claim requirements that differ depending upon the source of the loss.

From 1 April 2017, the loss carry forward rules were relaxed to allow carried forward losses to be offset against future total profits of a company. Prior to 1 April 2017, many losses brought forward had to be streamed in that if they were trading losses, they could only be set against future trading profits, etc. The reforms have resulted in two sets of rules that govern the use of carried forward losses ― one for losses arising prior to 1 April 2017 and one for losses arising on or after 1 April 2017. Where an accounting period straddles 1 April 2017, it is split into two notional periods and profits and losses are allocated on a just and reasonable basis.

The trade -off for this relaxation is the introduction of a restriction on the amount of profits that are availa

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