Currently trading losses in companies can be offset against
- other income and gains in the same period;
- all income in the previous period;
- any income of a group company in the same period;
- profits from the same trade in future periods.
The relief of non-trade losses is less flexible.
HMRC is now consulting on the best way to achieve the reforms promised from 1 April 2017, namely:-
- trading losses arising after 1 April 2017 can be carried forward and set against all income in the same or a group company; and
- Trading losses that arose before 1 April 2017 will still be available for offset against trading profit;
- only 50% of profits over £5 million can be covered by losses brought forward.
Date: 8th June, 2016
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