My client has ceased trading 15/11/08. Final accounts cover period from 1/7/07, therefore 2 APs, ie
APE 30/6/08 Loss £24,780
APE 15/11/08 Loss £11,577
For terminal loss relief purposes, I have to time apportion the loss for APE 30/6/08, which I calculate as £15,437.
So far so good. However, in APE 30/6/07, the client had a loss of £5,218 which was carried forward. It was not carried back to 30/6/06, as not much tax at stake, due to nil rate band. APE 30/6/05, slightly different hence now wish to make TLR claim.
Question is, do I have to amend 2007 and claim s393A(1) relief by carry back to 2006 in priority to the terminal loss relief claim, or can I just leave 2007 as it is and claim terminal loss relief alone?
Many thanks in advance
Peter Cane
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Replies (2)
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TLR sufficient
Hi Steve
Thanks for that. Yes, it is the case that the terminal loss relief claim alone would wipe out sufficient profits in 2006 (to nil) & to bring the total PCTCT for 2005 within the nil rate band.
I can't see anything in s393A that suggests I have to do the 2007 carry back in priority, but just wanted to check.
Don't want to submit returns with TLR claim only for HMRC to decide after 30/6/09 that 2007 loss should have been done in priority and we're out of time to amend it.
No obligation to use 07 loss first
Can see nothing that means you have to use the 30 June 2007 loss in favour of the terminal loss but (without knowing the exact facts of earlier years) why would you not want to now claim for the 2007 loss to be carried back to 2006 to free up more terminal loss against the 2005 profits?
Is it the case that the terminal loss is sufficiently large to extinguish all of the 2006 and 2005 profits and consequently there is no benefit to submitting a loss carry-back claim in respect of 2007?