Chapter 11 - Trading losses for individuals Flashcards
Can Capital allowances turn a tax adjusted trading profit into a loss?
Yes
Can Capital allowances increase a loss?
Yes
What is put on an individuals trading income assessment when there is a loss? (TOSD)
Nil
What are the four main reliefs for loss?
- Carry forward against future trading profits
- Relief against total income
- Opening year loss relief against total income
- Terminal loss relief against previous trading profits
What happens to remaining loss when a claim against total income is made?
Remaining loss is carried forward
Unless the individual makes a claim to set the loss against chargeable gains
When can a taxpayer relieve trading losses against total income?
- tax year of the loss, and/or
- previous tax year.
A claim may be made in:
- either year in isolation, or
- both years, in any order.
Is a partial claim against total income allowed?
No
What is carry forward relief used against
- First available
- Trading profits
- of the same trade
Can you carry forward loss indefinitely?
Yes
Can you use carry forward relief for a partial relief?
No
When can claims against total income be made?
In the tax year of the loss or previous year.
For claims against total income, what order can you claim the relief in this and last year?
Either years in isolation or both years in any order.
Before a trader can make a claim for relief against chargeable gains, what must have been reduced to zero first.
The total income of the year in question.
If a trader makes a claim against chargeable gains. Must they claim the full amount?
Yes
For special opening year loss relief, what years does this apply to?
The first four tax years of trading
