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Terminal losses under the new loss rules.
A standalone company is planning to have a final accounting period of three months to 31 March 2019 when it will cease trading. The trading losses for that period are expected to be £60 000. In the previous accounting period to 31 December 2018 it also had trading losses of £90 000 that were carried forward under CTA 2010 s 45A(4). The period before this was the nine months to 31 December 2017 when the company had trading profits.
The extended terminal loss rules of CTA 2010 s 45F give relief for this carried-forward loss against the previous three years’ profits but not for a period before the loss-making period (CTA 2010 s 45F(4)(b)). So under these rules the company cannot use any of the £90 000 as a terminal loss.
However the original terminal loss rules of CTA 2010 s 39 allow...
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