Carry forward Corporation Tax losses
Find out about the type of losses your company can offset against profits in future accounting periods.
Certain losses that your company has not used in any other way can be offset against profits in future accounting periods.
Carry forward a trading loss
Your company can carry trading losses forward to deduct from profits of future accounting periods as long as the trade continues.
If your company is using a carried forward trading loss in an accounting period that ends before 1 April 2017, you can only use the relief against profits of the same trade.
Where your company is using a carried forward trading loss in an accounting period that starts on or after 1 April 2017, the situation depends on when your company made the loss in question. If your company made the loss:
- before 1 April 2017, it can only be used against profits of the same trade
- on or after 1 April 2017, it can normally be used against your company’s total profits
There are special rules for accounting periods that start before and end on or after 1 April 2017.
If your company is part of a group and has carried forward trading losses made on or after 1 April 2017, other companies in the group may be able to use those losses. This is called group relief for carried forward losses.
Find more information about trading losses.
Carry forward a UK property business loss
If your company has unused losses from its property business, it can generally carry them forward to future accounting periods.
Your company can apply these losses to its total profits. This is the case whether your company made the loss before or on or after 1 April 2017.
If your company is part of a group and has carried forward UK property business losses that it made on or after 1 April 2017, other companies in the group may be able to use those losses. This means that where your company is part of a group, it will need to apportion property losses for accounting periods that start before and end on or after 1 April 2017.
The exception to this rule is where the loss arose in a period for which your company was chargeable to Income Tax on its UK property business profits or other UK property income. This type of loss can only be carried forward against your company’s UK property profits or other UK property income and is to be used in priority to any losses arising on or after 6 April 2020. This type of loss is not affected by the restriction to relief for carried-forward corporation tax losses that applies from 1 April 2017.
Find out more about property income losses.
Carry forward a capital loss
If your company has capital losses that are not used against capital gains in the same accounting period, they are carried forward and have to be deducted from later capital gains. Your company can only set these losses against later capital gains. In some circumstances, for example when a company joins another group, the use of carried forward capital losses may be restricted.
Find out more about capital losses.
Restriction on relief for carried forward losses
There is a restriction on the total amount of some types of carried forward loss that you can use against your profits.
Find out more about the restriction to carry forward trading losses and the restriction to property business losses.
Accounting periods straddling 1 April 2017
If your company has an accounting period that begins before, and ends on or after 1 April 2017, it will need to apportion:
- the trading losses made in that period
- its property business losses made in that period if your company is in a group
You can do this by time, to reflect the proportion of the period that falls before 1 April 2017 and the proportion that falls after that date. Alternatively, if this does not produce a just and reasonable result you can use an alternative basis that is just and reasonable.
You need to apportion your company’s losses in this way because different rules apply to carried forward losses made before 1 April 2017 and carried forward losses made after that date.
Records you need to keep
How your company can use carried forward trading and property business losses depends on whether your company made the losses before or on or after 1 April 2017.
You need to keep separate records for carried forward trading losses your company made:
- before 1 April 2017
- on or after 1 April 2017
If your company is in a group and has carried forward property business losses, you need to keep separate records for property business losses that were made:
- before 1 April 2017
- on or after 1 April 2017
This means you know how much your company has left of each type.
Check what other company and accounting records you need to keep.
Administrative requirements
Your company may need to fulfil some administrative requirements if it is using carried forward losses.
Carried forward losses on your Company Tax Return
Carried forward trading losses against profits of the same trade
Enter these in box 160 on your Company Tax Return.
All carried forward trading losses that your company made before 1 April 2017 will be in this category.
For accounting periods starting from 1 April 2017, your company can specify how much of this type of loss it wants to use. You can use the full amount, or you can:
- enter less than the full amount available
- use none in this period by putting a 0
If your company has trading profits in an accounting period that begins before and ends after 1 April 2017, you can only choose to limit how much carried forward loss relief you use for the part that falls on or after 1 April 2017.
Unused losses will be carried forward to the following accounting period as long as the trade continues.
Carried forward trading losses set against total profits
Enter these in box 285 on your Company Tax Return.
If your company has carried forward trading losses that it made on or after 1 April 2017, it can generally use them against its total profits. Trading losses from before 1 April 2017 cannot be used in this way.
You can specify how much of this type of loss your company wishes to use. You can use the full amount, or you can:
- enter less than the full amount available
- use none in this period by putting a 0
Carried forward UK property business losses
Enter these in box 250 on your Company Tax Return along with any property business losses from your company’s current accounting period.
As with trading losses carried forward against total profits, your company can use less than the full amount available, or use none. This is only available in accounting periods on or after 1 April 2017.
If you have profits in an accounting period that begins before and ends after 1 April 2017, you can only choose to limit how much carried forward loss relief you use for the part that falls from 1 April 2017.
Carried forward capital losses
Enter these in box 215 on your Company Tax Return along with any capital losses from your company’s current accounting period.
You cannot choose to limit how much of this type of loss is used.
Last updated 22 June 2020 + show all updates
-
Carry forward a UK property business loss section has been updated.
-
First published.