B/Fwd trading Loss and rental profit

B/Fwd trading Loss and rental profit

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Just taken on a client where the previous agent has prepared a CT600 but been unable to file it.  I think loss relief may be the issue but a while since I've been involved in this.

The company carried forward trading losses of £60,000 from the prior year and had a profit of £9,000 this year and £20,000 profit from rental income.  Stage one appears corrects in using £9,000 of the loss C/F to contra this year’s profits.  Then the tax comp shows £20,000 of the C/F trading losses used to contra the rental profits (shown in box 30 of the CT600).  Am I right in thinking that only current year trading losses (rather than those brought forward) can be used against the current year rental profit?  There were no rental losses carried forward.

I would welcome any comments on the above.

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By Euan MacLennan
27th Jun 2012 17:15

You are right

Trading losses carried forward can be set only against profits of the same trade under s.45(4) CTA 2010.

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By Robert Hurn
27th Jun 2012 17:35

Thank you Euan, my sanity is restored

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