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HMRC internal manual

Company Taxation Manual

Corporation Tax: trading losses: general: relief for losses carried forward: summary

CTA10/S45, CTA10/S45A-H, CTA10/S137(7)

The treatment of carried forward losses was reformed by Finance (No2) Act 2017 which introduced changes to the tax treatment of carried forward losses providing increased flexibility in how losses arising from 1 April 2017 can be relieved.

Losses incurred before 1 April 2017

Losses incurred before 1 April 2017 can only be carried forward and set against profits of the same trade.

Carried forward pre 1 April 2017 trading losses are also unavailable for group  relief, they are only available for group relief in the period in which they arise.

Losses incurred from 1 April 2017

The treatment of carried-forward trade losses incurred on or after 1 April 2017 depends on: 

  • The period in which they were sustained, and
  • Certain characteristics of the trade.

Companies can set off most trade losses incurred from 1 April 2017 against total profits.

Companies may also be able to claim or surrender losses incurred from 1 April 2017 as group relief for carried-forward losses.

Trade losses incurred before 1 April 2017 and certain trade losses incurred at a later date are available for set off against profits of the same trade only.