Sarah Squires (Old Square Tax Chambers) reviews the operation of the loss restriction, the deductions allowance and the related compliance issues.
Last month’s article on ‘The new corporation tax carry forward loss reliefs’ (Tax Journal 6 September 2019) discussed the various carry forward loss reliefs available as a result of the 2017 reforms. The other aspect of those reforms is the introduction of a restriction on a company’s ability to use carry forward relief to offset future profits. The rationale for this was that without such restriction ‘businesses making substantial UK profits may not pay any corporation tax due to losses incurred from historic activities’ – apparently an undesirable outcome.
The loss restriction is contained in CTA 2010 Part 7ZA. It applies to all losses within the three categories of loss relief described in the September article (streamed trading losses...
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Sarah Squires (Old Square Tax Chambers) reviews the operation of the loss restriction, the deductions allowance and the related compliance issues.
Last month’s article on ‘The new corporation tax carry forward loss reliefs’ (Tax Journal 6 September 2019) discussed the various carry forward loss reliefs available as a result of the 2017 reforms. The other aspect of those reforms is the introduction of a restriction on a company’s ability to use carry forward relief to offset future profits. The rationale for this was that without such restriction ‘businesses making substantial UK profits may not pay any corporation tax due to losses incurred from historic activities’ – apparently an undesirable outcome.
The loss restriction is contained in CTA 2010 Part 7ZA. It applies to all losses within the three categories of loss relief described in the September article (streamed trading losses...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
