Losses for single companies Flashcards
How can losses from companies be offset?
Losses from companies can only be offset against total profits.
What combination of loss reliefs are acceptable for companies?
Current year only current year, carry back current year, carry back and carry forward current year carry forward carry forward only
When a company has ceased trading how can it offset its losses?
It can carry back the losses for 36 months but must offset the losses on a LIFO basis.
How long do you have to make a carry back loss?
You have 2 years from the end of the period to make a carry back claim.
What order are trading losses offset?
Trading losses must be applied after the deduction of capital losses.
What is different about carry forward losses when comparing them to current year and carry back losses.
Carry forward losses can be restricted therefore preserving QCD’s
When discussing the carry forward claim, what is the deduction allowance?
A company can only use a maximum of £5mn of losses for a carry forward. Then subtract £5mn from the profit and then 50% of that figure.
What is the trading loss proforma?
Trading income Other income and gains Total Profits Current period Carry back Carry forward Less QCD's Taxable total profits
How do you treat property losses?
Property losses can be offset against current year total profits and total profits of other group companies.
If they cannot be offset in the current year then they can be carried forward.
Please note that property losses cannot be carried back.
How are capital losses offset?
They are automatically offset against first available gains to the fullest extent possible.
They cannot be offset against any other income and cannot be carried back.
Any unutilised capital losses will be carried forward and offset against gains in the next period.
How are deficits on non trade loan relationships treated?
Deficits can be offset against total profits of the current year.
When must carry back/current year claims be made?
Within 2 years of the y/e where the loss has been made.
When must carry forward claims be made?
Within 2 years after the year end where the loss has been made.
Where there has been a major change in the nature of conduct or trading, what are the restrictions to losses?
Losses are restricted 3 years before the change and 5 years after the change.
Losses before the change cannot be carried forward and losses that occurred after the change cannot be carried back.
