Terminal trading loss relief

By Tolley
Terminal trading loss relief

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Terminal trading loss relief
  • Terminal loss relief for trade losses in the final 12 months
  • Terminal loss relief for carried-forward trade losses post-1 April 2017
  • Administration
  • Anti-avoidance and terminal losses

Terminal loss relief for trade losses in the final 12 months

Trading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting period for the company is from 1 January 2025 to 31 December 2025, the three-year period for this terminal loss relief will be from 1 January 2022 to 31 December 2024.

CTA 2010, s 39

It is likely that this will involve an apportionment of losses incurred in the penultimate accounting period because cessation accounts are not always exactly 12 months long.

Where the carry-back claim is made against profits of more than one accounting period, losses must be offset against later years first.

A claim can only be made against the profits of the relevant year if the comp

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