Trading losses Flashcards
1
Q
Trading losses
A
If trader makes a loss then NIL is entered as “Profit” for the period never the loss
Losses set against an individuals income then gains. Can then set losses against total income of:
This year or last year or both or not at all. If this is not done then it must be carried forward and offset against first available profit.
Cannot restrict loss relief to keep personal allowance
2
Q
Trading losses in the opening years of trade
A
Losses in the first 4 tax years of trade can be carried back and set against total income of the 3 tax years preceding the loss on a FIFO basis (year 1 then 2 then 3)
