Loss Relief for Companies

Question 1

Loss Relief for Companies

What are Trading Losses Carried Back Against?

Answer 1

Total Profits of the Previous 12 Months.

Question 2

Loss Relief for Companies

What are Total Profits?

Answer 2

Income and Gains Before Deducting Qualifying Charitable Donations.

Question 3

Loss Relief for Companies

What is Beneficial About a Carried Forward Claim Not Being ‘All or Nothing’?

Answer 3

Tax Relief on Qualifying Charitable Donations Paid in a Future Accounting Period is Preserved.

Question 4

Loss Relief for Companies

What Condition Must be Met to Ensure Losses Carried Forward Attract Relief?

Answer 4

The Company Must Continue to Trade in the Accounting Period Relief is Given.

Question 5

Loss Relief for Companies

Brought Forward Losses are Restricted to the Lower of:

Answer 5

• The Unrelieved Losses; or
• The Deduction Allowance + 50% x (Unrelieved Profits - Deductions Allowance).

The Deduction Allowance is £5 Million for a 12-Month Accounting Period.

Question 6

Loss Relief for Companies

A Company’s Corporation Tax Return Must Specify:

Answer 6

• The Amount of Deduction Allowance;
• The Allocation of Deduction Allowance (Where Relief for Losses Carried Forward is Available Against Certain Profits).