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HMRC internal manual

Company Taxation Manual

Corporation tax: CT loss reform: commencement: example 3: company makes overall profit in the AP straddling 1 April 2017: no carried-forward losses relieved in the period

Before reading this example, please check the note concerning examples at CTM04900, which sets out the key assumptions made.


If the company makes an overall profit and there are no carried-forward losses that can be relieved in the straddling accounting period, the commencement provisions do not apply. This is because those provisions are relevant only for the purposes of applying Schedule 4.

This may occur because:

  • There is no loss carried-forward at the beginning of the period, or
  • Any loss carried-forward cannot be set against the profits of the straddling period.


In its accounting period from 1 January 2017 to 31 December 2017, Company C has:

  • £1,000,000 trade losses carried-forward under CTA10/S45 from previous accounting periods,
  • £100,000 trade losses incurred in the accounting period,
  • £500,000 property business profits, and
  • No non-trading profits.

The company sets the £100,000 losses of the period against its property business profits, leaving a net profit of £400,000.

The company does not have any losses of the period remaining to carry forward to subsequent accounting periods, so there is no reason to apportion amounts for this purpose.

The company cannot use its carried-forward trading losses in this period because it has no trading profits to set them against. It has no other losses carried-forward from previous periods, so there is no need to calculate the loss restriction or apportion amounts for this purpose.

The unused trade losses carried-forward from previous periods are carried-forward once again to the accounting period immediately following the straddling period as pre-1 April 2017 trade losses, under s45.