Corp Tax - Chapter 15

Question 1

Non trading losses CY claim

Answer 1

Whole or part of the deficit from any profits

Question 2

NTLR losses before or after Trading Losses

Answer 2

Before

Question 3

Carry back claim NTLR lower of:

Answer 3

Amount of deficit not subject to CY Claim (CY claim does not need to be made first)

Non trading profits of the earlier accounting periods.

Question 4

Claim date for Carry Back

Answer 4

Two years after end of deficit period

Question 5

Carry forward relief

Answer 5

Normal restrictions apply - max 50%

Relief is not automatic - claim within two years.

Question 6

Non trading IFAs - CY, CB and CF

Answer 6

CY - Against total profits, two years of end of loss period.

CB - Not allowed

CF - carry the loss forward and treat the loss as a non-trading IFA loss in the next accounting period. Whole or Part…

Question 7

Capital losses

Answer 7

CY - Not available against other income

CB - Not allowed

CF - Against CG

Question 8

CF - Capital losses anti avoidance

Answer 8

There is a targeted anti-avoidance provision to prevent companies entering into arrangements on or after 29 October 2018 to take advantage of the unrestricted offset of brought forward losses incurred before 1 April 2020.

If the main purpose, or one of the main purposes, of such arrangements is to obtain an increased amount of loss relief on the basis that the loss restriction does not apply to losses incurred before 1 April 2020, then the company is only permitted to claim a deduction for 50% of losses incurred as a result of the arrangements in subsequent accounting periods (without the benefit of the deductions allowance).

Question 9

Excess management expenses before or after QCD and loss claims

Answer 9

Before

Question 10

Definition of excess management expenses.

Answer 10

Expenses > Profit for period.

Question 11

Excess Management CY Claim

Answer 11

N/A

Question 12

Excess Management CB Claim

Answer 12

N/A

Question 13

Excess Management CF Claim

Answer 13

Offset against future total profits

Claim is not automatic and claim within 2 years.

Question 14

Compliance with CF

Answer 14

A company must specify the amount of its deductions allowance in its corporation
tax return.

The return must also specify the allocation of the deductions allowance between
different types of profits if the loss carried forward can only be used against certain
kinds of profits, eg capital losses set against chargeable gains only.

The way in which the deductions allowance increases the amount of carried
forward loss relief that a company is entitled to operates in the same way for all types of loss.