I'm having a hard time understanding what CTA10/45A (1)-(3) means, relating to carry-forward losses.
I understand that if the trade ceased in the loss-making period, then the loss wouldn't be able to be carried forward against total profits.
However, assuming in the 1st accounting period, there is a loss made of £10k. In the 2nd accounting period, another loss is made of £5k and in that 2nd accounting period, the trade ceased.
We'd be able to carry-forward the £10k loss against total profits in the 2nd accounting period. It's also clear that we wouldn't be able to carry forward the £5k loss to be set-off against total profits in the 3rd accounting period.
However, assuming we didn't use the £10 carry-forward loss against total profits in the 2nd accounting period, now that the trade has ceased in 2nd accounting period, can we continue to carry-forward the £10k loss from the 1st accounting period against total profits, in the 3rd accounting period?
Thanks a lot