Corporation tax losses Flashcards
(15 cards)
Are trading losses deducted before or after QCD?
Before QCD.
What order is trading loss & NTLR deficit relief carried out in and is it all or nothing?
- Current year first against total profits (for both) and then carry back only 12 months (NTLR only for NTLR deficits).
- All or nothing.
Is it all or nothing for carry forward trading loss relief?
No, there is partial relief. Any leftover relief can still be carried further forward.
For carry forward trading loss relief, how do we carry forward in the most effective way?
We still use QCD as much as possible then however much loss relief we can deduct after is used.
How many years can terminal loss relief (TLR) be carried back?
3 years.
For current year claim regarding NTLR loss, is it partial or all or nothing?
Partial, QCDs are preserved.
For carry back 12 months claim regarding NTLR loss, is it against total profits or NTLR profit?
It is only relieved against the NTLR profit.
How are property losses treated?
- Property losses are automatic and are all or nothing.
- They are used against total profits before QCDs.
- Any excess is carried forward.
What happens with brought forward property losses?
They are partial and so can be used in a way that still uses the QCDs.
Capital losses can only be used against…?
- Chargeable gains.
Capital losses are used against the first…?
Available chargeable gains - so carried forward.
What is the restriction on losses CARRIED FORWARD?
An annual deduction allowance of £5 million plus 50% of any excess profits/gains above this amount.
What order should trading losses be prioritised?
- NTLR losses
- Property losses
- Trading losses
What should the annual deduction allowance be allocated to first?
Capital losses, this is calculated separately using the annual deduction allowance formula and subtracted from the total brought forward losses.
When calculating terminal loss relief (TLR), do we calculate the current year loss first?
Yes.
