Company Loss Relief Relaxation

31 Jan 2020

Who said tax isn't relaxing?!.....
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. <span>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. </span>

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