Loss Relief Change of Trade

Loss Relief Change of Trade

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Hi, can anyone help?

Looking for clarification on whether particular circumstance constitutes a change in trade and affect on loss relief.

My clients (husband and wife) had run a wholesale fashion business through a Ltd Co.This proved unprofitable and company was made dormant 2 years ago with losses of approx £20k.There are no other creditors save for a director's loan.

The wife decided to work as a fashion consultant but preferred to be on a self employed basis.This is proving profitable and the question is whether to return to the Ltd Co format and in time utilise the losses brough forward if this is allowable?

On a wider scale the husband has another business/company which is in a totally different trade.

Thanks for any input.

Replies (3)

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By pawncob
20th Mar 2015 10:44

As they're both involved in the rag trade, I wouldn't think there's a major change, but HMRC might disagree.

 

See:

http://www.hmrc.gov.uk/manuals/ctmanual/CTM06370.htm

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Replying to Ian Lawrence:
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By Lass
20th Mar 2015 14:59

Thanks, that was my feeling.

We could proceed and put the losses through but don't want this to be rejected at a later point.

Has anyone ever obtained a ruling from HMRC in advance?

All comments appreciated.

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Replying to I'msorryIhaven'taclue:
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By Lass
20th Mar 2015 15:41

Also there is no change in ownership and the Co's Mem and Art allow for widening their commercial basis? Not that this may make any difference to HMRC?

 

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