Order of set of in an Invesmtent Company

Order of set of in an Invesmtent Company

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Our predecessor’s corporation tax computations shows that nontrading loan relationship deficits for the current year have been offset against Schedule A profits before using management expenses brought forward (current year’s management expenses used).

My firm’s corporation tax software shows that all management expenses (current and brought forward) are offset first before using the current year’s non trading loan relationship deficit.

Consequently whilst our predecessors computation shows a figure for excess management expenses carried forward my software is showing the same figure as a non trading loan relationship deficit carry forward.

The corporation tax manual that we use suggests that our predecessor may be correct it that it says ’a company can deduct its non trading loan relationship deficits against available profits before deducting its management expenses’ – however it only says can not must.

Before I phone up our software vendor’s help line I would like to be sure of the correct order of set off and also whether the carry forward figure makes any difference in practice as I believe the non trading deficit will be available to offset against all future non trading profits of the company.

Thanks

Paul

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