Module 5: Income Tax Losses and Module 6

Question 1

Restriction of total value of trading losses which can be offset against non-trading income

Answer 1

Greater of:
£50,000 or
25% of total income for that tax year

Question 2

No restriction on amount of loss offset against income from the

Answer 2

Same trade

Question 3

Maximum loss set off against capital gains

Answer 3

Lower of:
Trading loss remaining after current/ prior year claim

Capital gains for the tax year net of current tax year capital losses and all brought forward capital losses

Question 4

Claim must be made by

Answer 4

31 January 2021 for 2018/19

Question 5

Conditions of s86 claim (carry forward of losses to a limited company)

Answer 5

Consideration must be 80% or more in shares (20% or less in cash)

Question 6

Loss relief for transfer of a business to a limited company =

Answer 6

Automatic

Question 7

Terminal loss =

Answer 7

Trading result of period 1
Trading result of period 2
Unrelieved overlap profits from earlier in the trade

Question 8

Normal loss =

Answer 8

Losses in final period + unrelieved overlap profits

Question 9

Property losses can only be relieved against

Answer 9

Property income

Question 10

Losses from overseas lettings can only be relieved against

Answer 10

Future income from these lettings

Question 11

s83

Answer 11

Carry forward against trading income

Question 12

s64

Answer 12

Current/ prior year against net income

Question 13

s72

Answer 13

Losses in first four years against net income (FIFO)

Question 14

s86

Answer 14

Incorporation - income from the company (salary then interest then dividends)

Question 15

s89

Answer 15

Terminal loss against trading income only carried back 3 years (LIFO)

Question 16

Trading loss relieved against capital gains

Answer 16

Trading loss first set against net income, then excess loss set against capital gains

Question 17

Claim date for relieving against capital gains

Answer 17

31 January two years after end of year of tax loss