16. Losses for companies

Question 1

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?

Answer 1

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

Question 2

How does terminal loss relief work?

Answer 2

Set against TOTAL PROFITS of 3 YEARS PRECEDING on a LIFO BASIS

Question 3

What effects which methods of loss relief a company may choose to use?

Answer 3

• Tax saving
• Cash flow
• Loss of relief for QCDs

Question 4

How does property business relief work?

Answer 4

Set against CURRENT AND FUTURE TOTAL PROFITS BEFORE QCDs
Has to be claimed in full current year
Can be partial in following

Question 5

How does capital loss relief work?

Answer 5

Automatic against CURRENT ANF FUTURE GAINS

Partial claims NOT allowed