An important restriction in the use of losses carried forward was introduced by Finance (No 2) Act 2017, which received Royal Assent on 16 November 2017. Subject to a deminimis of £5m, most carried-forward losses are restricted to a set-off, which is limited to 50% of profits.

HMRC issued draft guidance on 31 July 2017, which can be found here. This is a first tranche of guidance, focusing on the core rules and other aspects where guidance has been specifically requested. A second tranche of guidance was issued on 9 November 2017 and can be found here. The second tranche of guidance covers group relief for carried-forward losses and the relaxation of carried-forward non-trade losses. Further draft guidance on commencement provisions was issued on 7 December 2017.

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