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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Corporation Tax: trading losses: general: computation of loss


For the purposes of relief for trade losses (CTM04050) the loss incurred in a trade in any accounting period is computed in the same way as trading income, making the usual computational adjustments to the profit or loss shown by the accounts.

‘Trading income’ means the income of the trade included in the total CT profits of the company. Therefore ‘trading income’ does not include any chargeable gains.

Capital allowances augment and balancing charges decrease the loss. In some circumstances (CTM04300) trade charges can augment a loss.

Relief is only given for losses incurred at a time the trade is carried on within the charge to CT - see CTM04020.