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Corporation Tax losses

Corporation Tax losses

Can they be transferred by billing them to the new business now being run as a sole proprietor?

Also since the business in question as built up quite a number of clients could part of the losses be treated as goodwill in

the business now being run as a sole proprietor?


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21st Apr 2012 10:00

If I read this correctly

You had a company carrying on a trade and that trade was transferred to an individual (presumably the director/shareholder)?

If so, any trade losses unused at the time of transfer to the individual are lost. But ....

... what about the goodwill? You don't say what type of business is involved, but if it had a transferrable value then it is probable that a gain arose on the transfer to the individual. Whether that gain was a capital gain or an intangible profit will depend on when the company started to trade. If intangible, then it will either be extinguished by sufficient trade losses or will fully utilise any insufficient trade losses. If capital, then offset of losses will be restricted to losses arising in the final period.

In short, far more information will be required it you are to hope for a more meaningful response.

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