Incorporated Losses Flashcards
(10 cards)
Trading losses
Calculating
And when to claim
Total trade profits less:
Capital allowances
SBA
IS NEGATIVE
put zero in computation for CY
Claim within 2 years of end of year the loss relief claimed or will be claimed if option 1
Trade loss option 1
Current year THEN carry back
Against total profit before QCD.
Offset all available, may waste QCD
Trading option 2
Carry forward, or excess from option 1.
No relief in year loss occurred.
Offset against total profit, before QCD.
Partial claim allowed tho, I.e. leave QCD amount remaining and carry forward the XS.
Terminal loss relief
Same as sole trader
Carry back 3 years, LIFO basis.
QCD gets wasted same as option 1
Claim by two years of end of period loss occurred
NTLR deficit options
1) offset against PY NTLR profit
2) offset against total profits CY (partial claim)
3) offset against future total profits (partial claim allowed)
Partial claim preserves QCD amounts.
Capital losses
Offset only against capital gains
CY offset against gains, cf XS
B/f: offset against first available future gains
Property losses
1) current year property loss:
Offset against total profits, no partial claim, QCD wasted.
Carry forward the excess.
2) brought forward property losses:
Offset against total profits,
Partial claim can be made. Preserve QCD
Priority of loss relief CY
(Preserve as much QCD in CY and future years)
1st NTLR (partial claim in CY against TP)
2nd Property losses
3rd Trading losses
Limit of C/F loss relief
Annual deduction allowance
If total losses are greater than £5 million THINK.
Deduct capital losses brought forward first. (Partial claims)
Annual deduction allowance is:
£5 million plus 50% of total profits (I.e. before QCD) OVER this.
Other losses CAN offset
Gainsssss
Gains losses only against gains
