CH 14 - Losses - Continues Trades Flashcards
Loss under ITA 2007, s.64
(explain)
Loss can be aused against Net Income in the current and/or preceding year.
(no partial claims are permitted, meaning PA can be wasted)
ITA 2007, s.64
PT
What to consider at Loss Planning?
- savings tax at the highest possible marginal rate
- avoiding wastage of PA
- using earlier rather than later
What is extention of ITA 2007, s.64
remaining trading loss after s.64 can be used against capital gains of that year, ITA 2007, s.71
(claim can be made as s.64 in current & preceding tax year, restriction applies, lower of …)
under ITA 2007, s.71
what is the restriction?
The loss that must be used is the lower of:
- the loss remining after the s.64 claim for that tax year &
- the relevant maximum
(net gains less all capital losses b/fwd)
describe ITA 2007, s.83
allows unutilised losses to be c/fwd against future profits from the same trade.
What is the deadline for submitting;
s.64
&
s.83
under s.64 - 1st anniversary of 31.01 following the tax year of the loss
under s.83 - within 4 years from the end of tax year 05.04
(although automatic, must be made to establish the amount of loss to be c/fwd)
Which loss reliefs the loss restriction applies to and when not?
Loss relief restrictions applies to;
- ITA 2007, s.64 & s. 72 (‘sideways relief’.
- relief for post-cessation payments &
- qualifying loan interest.
Does not apply where a loss is set against income from the same trade.
When loss relief will be denied ?
if trading isn’t conducted on acommercial basis with a view to realise profits
____
No loss relief is available unless the trade is being carried on a commercial basis and with a view to the realisation of profits.
(ITA 2007, s.66)
What is MAX.
‘sideways loss relief’
&
CG relief
for a ‘non-active’ ST?
a ‘non-active’ sole trade can claim
£25,000 in respect of a trading loss.
what means
‘Sideways loss relief’
?
means losses relieved against net income under
ITA 2007s.64 & s.72
