Trading losses and anti-avoidance

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

Summary of trading losses anti-avoidance rules

There are several anti-avoidance rules involving the utilisation of trading losses which are summarised below:

Conditions	Consequences
Major change in nature or conduct of trade of the company, or the company’s activities become small or negligible (without a change in ownership of the company)	Trading losses arising after the change in ownership cannot be relieved against profits arising before the change and losses carried forward cannot be relieved against trading profits or total profits. Relief is lost completely. See below
Post-1 April 2017 change in ownership and major change in the business of the company	Losses eligible for carried forward relief against total profits are not available against post-change of ownership profits, including terminal losses. Relief is lost for five years. See below
Post-1 April 2017 change in ownership, and:	Trading losses available for carried forward relief, including terminal losses, are not available against the gain. Relief is lost for gains arising within five years. See Simon’s Taxes D1.1127
– no gain, no loss transfer within a group or tax neutral transfer

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Payment of the remittance basis charge

Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay

14 Jul 2020 12:52 | Produced by Tolley Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

Owner-Managed Businesses

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more

��Ƶ