Chapter 21 - Corporation Tax Losses

Question 1

How do capital losses have to be offset?

Answer 1

Against capital gains in the same period.

Question 2

Can you carry forward losses that you cannot offset in the current period?

Answer 2

Yes - can be carried forward to offset against future gains.

Question 3

Can you carry forward unutilized trade losses, property losses and NTLR deficits?

Answer 3

Yes - they can be carried forward to offset against total profits.

Question 4

How do the terminal loss relief rules work when a company ceases to trade?

Answer 4

Any terminal losses can be carried back against the total profits (not trade income) in the last 3 years.

Question 5

What is a terminal loss?

Answer 5

The trading loss from the last 12 months of trading (before cessation of trade).

Question 6

How does a carry back claim work for corporation tax losses?

Answer 6

Is an all or nothing claim (cannot choose how much to offset).
Company has to have made a current year claim first to offset any losses using the carry back claim.