I haven't done a terminal loss relief claim for ages. Maybe 25 years ....
I have a client who has ceased trading owing to a perfect storm of failing health and Covid-19. The final period shows a loss, including a fair size balancing allowance and overlap relief of £11531.
Profits and income are
Year to 31 Aug 2018 £6308
Year to 31 Aug 2019 £8362
250 days to 7 May 2020 £11531 loss
He also has pension income of £10500 a year.
I calculate the terminal loss as £11531 less 116 days worth of £8362 (£2657) or £8874.
My questions are
1. He's lost £11531 and the terminal loss is £8874. Can he claim the balance of £2657 by sideways relief ?
2. Can he choose what order to claim the losses or is terminal loss a relief of last resort ?
3. Is this calculation right anyway ?
I suspect he's going to lose out somewhere along the line as sideways relief will be against general income. Obviously, terminal losses are restricted to trading profits so they'd suit this case much better.