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Can I offset part of losses b/fwd to retain benefit of £10k at 0%?

Can I offset part of losses b/fwd to retain...

Probably basic stuff, but it's a few years since I qualified, and now only doing accounts for my own business - have trawled through Any Answers, and IR web-site, but 2 hours later, still clueless! (Bless!).

Situation is... limited company has brought forward losses of £39k. Current year (to 31/12/05) profits (phew) of £18k. Haven't claimed any capital allowances yet, either. Can I just offset £8k of the losses so that I still have my £10k at 0%? (Making the most of it before it disappears). Or do I have to take the full £18k? Would it be better to hold on to the losses until the £10k band disappears next year and cough up the tax on the current year's profits (and claim the capital allowances)?

Would be grateful for some help. Thanks so much.

Sue Hill

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By ACDWebb
07th Jan 2006 01:50

See
TA s393 - http://www.hmrc.gov.uk/taxes_act_2000/vol02/icta_pt10/ictapt10-17.htm

and

HMRC CT Manuals CTM04100 - http://www.hmrc.gov.uk/manuals/ctmanual/CTM04100.htm

The gist of which is

Can I just offset £8k of the losses so that I still have my £10k at 0%? - No the loss is carried forwards and set against profits of the same trade in the first available year in their entirety, or to the amount of the profits in that year with the balance carried forwards.

Would it be better to hold on to the losses until the £10k band disappears next year You cannot. The loss is set off against the first available year "in order & without omission"

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08th Jan 2006 13:58

Thanks
Thank you, Alan.

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