My client has trade losses brought forward of £30,562. Curreny year profits are £23,407. My tax software (BTC) is forcing me to offset the whole £23,407 of brought forward losses against this years profit. Is that correct? can I not restrict the loss off set so as not to "waste" the personal allowance of this year?
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The tax software is correct.
The tax software is correct. The loss can not be restricted to use the personal allowance.
Tax planning - Capital Allowances
The only flexibility is with Capital Allowances.
Options include:
Amend 2009/10 return to reduce capital allowances claim (if any) to reduce losses b/f and thereby increase value eligible to future capital allowances on.
2010/11 results of £23,407: if this is after Capital Allowances then reduce or eliminate the claim as is most appropriate to more effectively use the losses b/f.
As previous posters have said losses brought forward MUST be offset against the first available subsequent profits arising.