Trading Losses

Question 1

Relief for losses carried forward

Answer 1

A trading loss may be carried forward and offset against the first taxable profits from the same trade

Needs a claim within 5 years of 31 jan to establish loss amount

Question 2

Relief for trading losses against total income

Answer 2

Trading loss may be offset against total income of tax year of the loss and total income of the previous tax year in either order or both

Claim must be made within one year of 31 jan following the end of the tax year of loss

Calculate original assessment , calculate lose available for relief
Apply relief

Question 3

Relief for losses in first few years of trade ?

Answer 3

When the current year basis has been established it can be set against the TI in that tax year however trading losses can only be relieved once and in the opening years of trading

Question 4

Relief for trading losses in the first four years of trade against total income

Answer 4

Losses in the first four tax years can be carried back and offset for three years before the tax year of the loss