LAM15100 | Excess expenses, losses and deficits: Set-off of Long-term Business Fixed Capital and other non-trading deficits (loan relationship and derivatives)

The debits and credits from non-trade (NT) loan relationship and derivative contracts are aggregated. A NT deficit arising in Long-term Business Fixed Capital (see LAM11000) is treated as a ‘normal’ non-trading deficit. See CFM32000.

In summary, NT deficits can be:

• set against shareholders’ share of total profits of the period

• carried back (in full or in part) and set against any NT profits not arising from BLAGAB of the previous 12 months;

• surrendered as group relief of the period;

• carried forward: losses incurred before 1 April 2017 can only be set against NT profits of subsequent periods;

• carried forward: losses incurred on or after 1 April 2017 can be:

  • set against NT profits;

  • set against the shareholders share of total profits;

  • surrendered as group relief

Set-off of carried forward NT losses is subject to the loss restriction rules (LAM15200).