1b. Corporation Tax - Loss Relief

Question 1

Describe corporation tax losses for property losses
1. What amount to offset agains CY
- before or after QCD
- is partial claims allowed
2. How to offset remaining losses
- before or after QCD
- is partial claims allowed

Answer 1

1. Must offset max amount possible
   - against current period total profit
   - before QCD
   - partial claims not allowed
2. If u relieved property losses remain
   - cf against future total profit
   - before QCD
   - partial claims are allowed

Question 2

For corporation tax loss relief describe the non trading loan relationship’ deficit
1. Is partial claims allowed
2 . What’s 4 option available
1) against current period
- what type: income or total profit
- before or after QCD
2) carry back
- what type of income
- how many months carry back
3) carry forward
- what type : income or total profits
- before or after QCD
4) xxxxx

Answer 2

1- partial claims allowed
2-
1) set agains current period total profit before QCD
2) carry back agains interest income only for 12 months lifo basis
3) carry forward agains future total profits before QCD
4) group relief if part of a group

Question 3

Describe the standard trading loss for a corporation company
1. Offset against
2. Before or after QCD
3. Compulsory or optional claim
4. Partial or all or nothing claim
5. Can you restrict the offset to preserve QCD relief
6. Which year must the claim be set agains first
7. What happens to the remaining losses

Answer 3

1. Offset agains total profit (gains and Income)
2. Before QCD
3. Optional claim
4. All or nothing claim- not partial
5. Cannot restrict the offset to preserve the QCD relief
6. Must claim against current year first then carry it back
7. Remaining losses carried forward

Question 4

What’s the claim date of a standard loss relief

Answer 4

2 years from the end of the accounting period where the loss arose

Question 5

If you wanted to carry back trading losses, what is the pervious accounting period is not 12 months
- cb AP falling within how many months before the loss making period
- on what basis
- must carry back how many months
- In earlier AP of carry back what would u need to do to the total profits

Answer 5

• carry back to accounting periods falling within 12 months before the loss making period.
• on a LIFO basis
• must carry back 12 months
• in earlier AP of carry back you would need to time apportion the total profits

Question 6

If you decide to carry the trading losses forward describe
- offset agains what
- before or after the QCD relief
- optional or compulsory claim
- partial or all or nothing claim possible ?
- can you preserve the QCD relief
- how long can you carry forward the standard trading loss

Answer 6

• offset agains total profit income and gains
• before QCD relied
• optional claim
  -partial claim
• can preserve the QCD relieve
• can be carried forward indefinitely

Question 7

What’s the restriction of trading losses carried forward if
1. Trade becomes small / negligible
- can only cf against future trading profits from what type of trade
2. If profits of company / group is larger than £5m
- what’s the max offset of all losses bf per year

Answer 7

1. If trade become small/ negligible
   - can only cf agains future trading profits from same type of trade
2. If profits of company / group is larger than £5m
   = max offset of all loses bf:
   £5m+ (50% x (total profits - £5m) ) per year

Question 8

When can you not carry trading losses forward
- what % shares change ownership AND
- what happens to the negligible trading activity OR
- what happens to to nature or conduct of trade

Answer 8

Can’t cf trading losses if
- more than 50% shares of change ownership and
- negligible trading activity is revived
- major change to the nature or conduct of trade

Question 9

What’s the claim date of trading losses carrying forward

Answer 9

2 years from the end of the accounting period of when the loss is relieved

Question 10

Describe the what u can do with capital losses in a corporation tax comp
1. Offset agains what period first of possible
2. Is partial claim allowed
3. when can you carry forward capital losses
- agains what

Answer 10

1. Offset against current period first if possible
2. Partial claim is not allowed
3. You can carry forward capital losses if overall net capital loss
   - only against future net chargeable gains

Question 11

Describe the termination loss relief for closing years for corporation company
1. What AP should you claim agains first
2. Carry back accounting period falling within how many months before loss making period
3. On what basis
4. Offset agains what
- Before or after QCD
5. Partial claims?
6. If there’s any short AP in the previous 36 months ?

Answer 11

1. Must claim agains current accounting period first before considering a carry back claim
2. Carry back accounting period falling within 36 months before loss making period
3. On LIFO basis
4. Offset against total profits income and gains
   - Before QCD
5. All or nothing relief no partial claim
   - can’t be restrict offset to preserve the QCD relief
6. If there has been a short AP in the previous 36 months: in earliest AP of carry back - need to time apportion the total profits

Question 12

What’s the claim date of terminal loss relief in a corporation company

Answer 12

2 years front the end of the accounting period in which the loss arose