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CTM07515 | Corporation Tax: tax avoidance involving carried-forward losses: relevant carried-forward losses

From HM Revenue & Customs · Company Taxation Manual

The rules apply to tax arrangements involving several types of carried-forward relief, referred to together in the legislation as ‘relevant carried-forward losses’:

  • Trading losses carried-forward under CTA10/S45, S45A or S45B;

  • Non-trading loan relationship deficits carried-forward under CTA09/S457, S463G or S463H; and

  • Management expenses carried-forward under CTA09/S1223 (2).

Management expenses includes carried-forward qualifying charitable donations made for the purposes of an investment business and unused losses of a ceased UK property business (CTA10/S63).

For accounting periods (APs) beginning on or after 1 April 2017, the following types of losses are also included as ‘relevant carried-forward losses’:

  • UK property business losses carried-forward under CTA10/S62 (5); and

  • Non-trading losses on intangible fixed assets carried-forward under CTA09/S753.

Where an AP straddles 1 April 2017, it is spilt into two notional accounting periods with amounts apportioned on a time basis or on a just and reasonable basis if the time basis produces a result which is unjust and unreasonable.