16. Losses for companies Flashcards
1
Q
What are the three methods of loss reliefs for companies?
- What income are they against?
- Can they be restricted?
- Deadline for claims or are they automatic?
A
Carry forward:
- Against total profits before QCDs
- Can restrict
- Automatic
Current year:
- Against total profits before QCDs
- Cannot restrict
- Within 2 years
Carry back:
- Against total profits before QCDs on LIFO basis
- Cannot restrict
- Within 2 years
2
Q
How does terminal loss relief work?
A
Set against TOTAL PROFITS of 3 YEARS PRECEDING on a LIFO BASIS
3
Q
What effects which methods of loss relief a company may choose to use?
A
- Tax saving
- Cash flow
- Loss of relief for QCDs
4
Q
How does property business relief work?
A
Set against CURRENT AND FUTURE TOTAL PROFITS BEFORE QCDs
Has to be claimed in full current year
Can be partial in following
5
Q
How does capital loss relief work?
A
Automatic against CURRENT ANF FUTURE GAINS
Partial claims NOT allowed