Blogger
Share this content
0
2
3004

Terminal losses - Corporation Tax

Hello, I am feeling a little thick today.  No changes there.  Can someone confirm that my thinking on Terminal Losses is correct please.  Here's the scenario:

A company made a profit of £50000 in its usual accounting year to 05/04/09.

It then made a profit of £20000 in the year to 05/04/10.

It then made a loss of £45000 during the year to 05/04/11; £20000 of which was carried back to 05/04/10, with the remaining £25000 carried forward to the following year to 05/04/12.

The company never made it to the end of 05/04/12 and ceased to trade on 31/10/11, making a profit of £3000 in the final period.  This profit was reduced to nil on bringing forward the £25000.  So, a £22000 loss remains.  Terminal losses can of course be carried back 3-years.  But, does this particular £22000 loss qualify as a 'terminal' loss, considering it's in fact brought forward from the previous to 05/04/11?  Yes or no?

Replies

Please login or register to join the discussion.

some of it

For terminal loss relief purposes, the loss has to be made in the last 12 months of trading. The terminal loss will therefore be 5/12 x 45000 (the actual calculation should be in days) less the £3,000 profit.

Thanks (0)

you may have seen this link already

but just in case, see below

http://www.hmrc.gov.uk/ct/forms-rates/claims/losses.htm#3

 

 

Thanks (0)