ACCA TX ^UK Syllabus E. Corporation Tax Liabilities - Relief for trading losses - for Companies - Notes ^{5 / 14}

Trading losses can be:

1. Relieved against Current year Total income

   You HAVE TO deduct the LOSS from Total Income FIRST and then deduct Qualifying charitable donations (QCD)

   The LOSS can be given to 75% group companies for relief against total income (Without relieving loss against their own income first)

2. Carried back against 12 months of Total income - AFTER the current year total income has been fully used for the trading loss

   You HAVE TO deduct the LOSS from Total Income FIRST and then deduct Qualifying charitable donations (QCD)

3. Carried forward against Future Total income (Trading, Property, Interest)

   Qualifying charitable donations can be saved (ie) the QCD is deducted before the LOSS

   The LOSS can be given to 75% group companies for relief against total income (The loss must be relieved against their own income first)

Note: The current year total income relief and carry back total income relief are normally used before the carry forward relief.

This is because companies want loss relief as soon as possible.