CTM07515 - Corporation Tax: tax avoidance involving carried-forward losses: relevant carried-forward losses

CTA10/S730F

The rules apply to tax arrangements involving several types of carried-forward relief, referred to together in the legislation as ‘relevant carried-forward losses’:

• Trading losses carried-forward under CTA10/s45, s45A or s45B;
• Non-trading loan relationship deficits carried-forward under CTA09/s457, s463G or s463H; and
• Management expenses carried-forward under CTA09/s1223(2).

Management expenses includes carried-forward qualifying charitable donations made for the purposes of an investment business and unused losses of a ceased UK property business (CTA10/s63).

For accounting periods beginning on or after 1 April 2017, the following types of losses are also included as ‘relevant carried-forward losses’:

• UK property business losses carried-forward under CTA10/s62(5); and
• Non-trading losses on intangible fixed assets carried-forward under CTA09/s753.

Where an accounting period straddles 1 April 2017, it is spilt into two notional accounting periods with amounts apportioned on a time basis or on a just and reasonable basis if the time basis produces a result which is unjust and unreasonable.