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HMRC internal manual

Company Taxation Manual

Corporation Tax: trading losses: general: relief for losses carried forward: companies going into partnership

Where a trading company

  • takes another person into partnership, and
  • continues to carry on the same trade,

it can

  • carry forward any losses incurred by it in that trade before the formation of the partnership, and
  • set-off the losses under CTA10/S45 (CTM04100) against its share of the partnership trading income.

This treatment applies where the partnership comprises two or more individuals or companies of which one was the original trading company.