Current year relief

Trading losses can be offset against total profits of the same period. Total profits covers, for example, chargeable gains or non-exempt dividends.

The maximum claim for relief is the lower of the available loss or the available profit. In other words, no partial claims are allowed and the claim must either use all of the loss, or eliminate all of the available profits. CTA 2010, s 37(3)(a)

There are several potential restrictions applicable to current year loss relief which are covered in the Introduction to trading losses guidance note.

Once trading losses have been relieved against profits of the same period in which the loss was generated, a claim may also be made under CTA 2010, s 37(3)(b) to carry back any remaining loss against profits of the preceding 12 months. This is explained in more detail below.

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