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Terminal losses

Terminal losses in an 18 month accounting period

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On the death of the sole director and employee of a company the accounting period was extended on the request of his executors to allow for us to rebuild the records of both the company and the director. As it turns out there are losses in this 18 month period. Can all these losses be carried back:; there are sufficient profits in the previous 12 month accounting period?

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By Tax Dragon
24th May 2022 13:04

Take a step back. When did trading cease? And don't forget s10 CTA 2009. Once you have the right results in the right periods, your question will cease to take its present form.

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Replying to Tax Dragon:
RLI
By lionofludesch
24th May 2022 16:54

Agree - from what the OP says, the CT accounting period is likely less than eighteen months. It will have ended when the trade ceased.

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By Hugo Fair
24th May 2022 21:20

Probably showing my ignorance on rather a basic point ... but it sounds like (and this is total guesswork) the executors 'allowed' the business to continue post the death of sole employee/director.
If so, and leaving aside the legality of doing so without any director on board (another assumption), then the business would have continued to incur costs despite few or no sales.
Would that state constitute a continuation of trading - or be more akin to the period of 'administration' of the estate?

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Replying to Hugo Fair:
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By lionofludesch
24th May 2022 21:33

If no sales, no. If few sales, probably.

But I read it that the date change was about delaying the filing date.

At this stage, who knows?

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Replying to lionofludesch:
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By Tax Dragon
24th May 2022 22:08

I confess I assumed a company with no directors or employees could not trade, but maybe "who knows?" is closer to what we have been told.

Re CT AP... don't forget rule 1 in s10... never more than 12 months (also CTM01510). So there may be three (or more) periods here - 12m, cessation, accounting date. (But again, who knows? I confess I had also assumed cessation was before 12m - rendering the 12m rule irrelevant [possibly], but I don't know what I based that on.)

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Replying to Tax Dragon:
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By lionofludesch
24th May 2022 22:14

Tax Dragon wrote:

I confess I assumed a company with no directors or employees could not trade, but maybe "who knows?" is closer to what we have been told.

Re CT AP... don't forget rule 1 in s10... never more than 12 months (also CTM01510). So there may be three (or more) periods here - 12m, cessation, accounting date. (But again, who knows? I confess I had also assumed cessation was before 12m - rendering the 12m rule irrelevant [possibly], but I don't know what I based that on.)

I thought the same. But we don't know what the company does. It may be that some beneficiary under the director's will is selling off stock or fulfilling orders prior to his death. Or it might be something else.

Could be anything, really. All options are open.

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Replying to Hugo Fair:
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By More unearned luck
26th May 2022 19:42

The executors are probably de facto directors. Perhaps, if the term existed 'director de son tort'.

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By Hugo Fair
26th May 2022 20:57

Interesting but way outside my areas of operation.

If an Executor de son tort means "a person who assumes to act as an Executor of the Estate without any lawful Warrant or authority granted by the General Executor and Guardian, but, who, by his intermeddling, makes himself liable and therefore subject to punitive action"
... then I guess you're saying that an Executor who behaves as if a de facto Director is also doing do without lawful Warrant but with personal liability?

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