Section 39 | Terminal losses: extension of periods for which relief may be given

(1)This section applies if—

(a)a company ceases to carry on a trade, and

(b)the company has made a terminal loss in the trade.

(2)Sections 37(3)(b) and 38(1) and (3) have effect in relation to the terminal loss as if the references to 12 months were references to 3 years.

(3)The following are terminal losses made in the trade—

(a)the whole of any loss made by the company in the trade in an accounting period that begins during the final 12 months, and

(b)the overlapping proportion of any loss made by the company in the trade in an accounting period that ends, but does not begin, during the final 12 months.

(4)The overlapping proportion is the same as the proportion that the part of the accounting period falling within the final 12 months bears to the whole of the accounting period.

(5)“The final 12 months” means the period of 12 months ending when the company ceases to carry on the trade.

(6)This section is subject to section 41.