Back to the future

24 September 2013

Issue: 4421 / Categories: Forum & Feedback , Companies

A “one-man” limited company carries on a trade, but it has invested some of its cash surplus into a futures trading account. It has made a £30,000 loss. Can it be set against trading profits?

My client is a standard owner-managed “one-man” limited company and carries out work as an IT consultant. During the past year the owner decided to invest a significant amount of the company’s cash surplus into a futures trading account in the company name. This is causing me a large headache.

According to the statement for the futures trading account as at the company year-end date a “loss” had been suffered during the period of about £30 000. This comprises the total cash originally paid into the trading account less the value that the account stands at as at the year-end date according to the account statement.

My question is how this should be treated in the company accounts and more critically how is it treated for corporation tax purposes?

Essentially the loss is unrealised so I am not entirely sure how...

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