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Company Loss Relief Relaxation

31 January 20

Losses arising from 1 April 2017 when carried forward will have increased flexibility and can be set against the total taxable profits of a company and its group members (‘loss relaxation’).

There are five types of losses that are affected. These are;

• trading losses

• non-trading deficits on loan relationships

• management expenses

• UK property losses

• non-trading losses on intangible fixed assets

The 1 April 2017 commencement date means that the rules applying to carried-forward losses depend partly on whether they were sustained before or after that date. Companies should make sure that their records reflect this and keep pre- and post-1 April 2017 losses separate, to avoid mistakes in their returns.

Companies continue to be more limited in the way they can use losses sustained before 1 April 2017 and certain other losses sustained after that date.

For losses pre 1 April 2017, carried-forward losses could only be used by the company that incurred the loss, and not used in other companies in a group. Additionally, certain losses could only be set against certain types of income, for example trading losses could only be used against trading profits.

If your company has carried forward losses or is expecting to generate losses in the future then get in touch to discuss how this may affect you and your company.


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