Any trading loss which is not relieved against current or prior year profits is carried forward for offset against future profits. The treatment of such losses and the profits against which they can be offset were reformed by Finance Act 2017, with the aim of providing more flexibility in how losses arising on or after 1 April 2017 can be relieved.

For ease, the commentary has therefore been broken down into a discussion of the rules that apply for accounting periods commencing on or after 1 April 2017 and those that apply for earlier periods. Where a company's accounting period straddles 1 April 2017, the periods before and after 1 April 2017 are treated as two separate accounting periods and profits / losses are time apportioned as needed.

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