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Corporation Tax - Terminal Loss Relief

Asking for confirmation that I do have a valid TLR claim

I have a corporate which ceased trading on 30th September 2017 and had a trading loss of £25200 for the 18 month period of account ending on that date. All previous periods were to 31 March.

My understanding is that I can use losses arising in the final 12 months (12/18 x £25200 = £16800) against profits arising in the preceding 36 months on a first in first out basis.

There are no taxable profits for the years ended 31 March 2016 and 2015 but 2014 shows TP of £25k, so am I correct in assuming that I can effectively claim for the part period of 1 October 2013 to 31 March 2014 for £12.5k loss relief to generate a £2.5k CT refund, or would that be limited to 6/12 of the terminal loss equating to £8400 giving a CT refund of £1680?

In addition, what do you find is the most effective way of making the claim - a letter?

Thanks in anticipation.

David

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13th Mar 2018 14:41

Yes, I'd agree with your assessment. You can do it via the return (though this may depend on your software) but I usually follow up the return with a letter to explain or, occasionally, call the corporation tax helpline who will request a call back from a member of their 'technical team' and they are usually pretty helpful.

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By Ruddles
to dhughes1975
13th Mar 2018 15:05

Which part do you agree with? £12.5k or £8.4k loss relief?

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to Ruddles
13th Mar 2018 16:03

Apologies, I completely misread the question.

I would agree with the £12,500 loss relief.

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By Ruddles
to dhughes1975
13th Mar 2018 16:20

Is that your final answer?

Or do you want to phone a friend?

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to Ruddles
13th Mar 2018 16:21

I'm happy for you to just tell me where I've gone wrong.

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By Ruddles
to dhughes1975
13th Mar 2018 17:08

Loss of final 12 months is £16,800 - £8,400 arising 1 Apr 17 to 30 Sep 17 and £8,400 1 Oct 16 to 31 Mar 17. So:

Loss 1/4/17 to 30/9/17 carried back to accounting periods falling within previous 36 months - 31/3/17, 31/3/16, 31/3/15. We're told that there's no profits for any of those periods, so no loss relief.

Loss 1/10/16 to 31/3/17 (£8.4k) arises in accounting period 1/4/16 to 31/3/17, so can be carried back to 31/3/16, 31/3/15, 31/3/14.

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to Ruddles
13th Mar 2018 18:09

What is the form for the claim?

I don't think you can amend a CT600 that far back, so you would just write in?

And would that need to be a letter signed by the director, or can an agent make the claim on their client's behalf?

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By Ruddles
to ireallyshouldknowthisbut
13th Mar 2018 19:40

The computations showing the loss should clearly indicate that TLR is being claimed, with the box on the CT600 checked to indicate that previous years are affected.

Followed by a letter, from the agent, confirming the details of the claim.

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