Unincorporated Trading Losses

Question 1

What is relief on OTHER INCOME (non-trading income) capped at?

Answer 1

The higher of:
- £50,000
- 25% of adjusted total income in the year that the loss is offsetting

Question 2

To claim relief against capital gains, what must you claim first?

Answer 2

You must have claimed either current year or carry back first and the remainder is offset against capital gains.

Question 3

If you work less than 10 hours a week, what is loss relief restricted to?

Answer 3

£25,000.

Question 4

How do you calculate adjusted total income?

Answer 4

Total income + payroll giving - gross pension contributions

Question 5

What is terminal loss relief only available against?

Answer 5

Trading income only.

Question 6

If a trader does not have a final period of trade between 31 March and 5 April, how is terminal loss calculated?

Answer 6

Loss made from 6 April in the final tax year to date of cessation + any loss made in the tax year before the final tax year (ignore if profit).

Question 7

When does a claim for terminal loss relief be made by?

Answer 7

Within four years of the end of the last tax year of trade.

Question 8

What is the relevant amount?

Answer 8

Taxable profits + employment income.

Question 9

What is relief against capital gains calculated at the lower of?

Answer 9

• Relevant amount (remainder of loss relief after current year/carry back)
• Maximum amount (total gains for the year - capital losses for the year - capital losses b/f)