CFM32050 - Loan relationships: non-trading deficits: claims for set-off against profits of the same or earlier periods

CTA09/S463B

General conditions for claims

Subject to a valid claim, companies can set non-trading deficits against any profits of the same period or non-trading profit of the earlier periods.

No claim can be made in respect of a deficit that is surrendered as group relief.

No claim can be made by a company that is a charity.

Time limits

Claims to set non-trading deficits against profits of deficit period or earlier periods under CTA09/S463B(1) must be made within two years of the end of the accounting period in which the deficits arise (CTA09/S463C). An officer of Revenue and Customs may extend the time limit. Requests to extend the time limit should be referred to Business, Assets and International (Trading and Property Income Team).

No double counting

While a company can claim in different ways for different parts of the deficits, the legislation ensures that it cannot claim more than once for the same part.

For example, if a company has a non-trading deficit of £7,000, it could

  • surrender £4,000 as group relief
  • make a claim to set £1,000 against profits of the current year
  • make a claim to carry back £500
  • carry forward the balance, £1,500

or any combination of these reliefs up to the amount of the deficit.

Pre-2017 non-trading deficits

For non-trading deficits arising in an accounting period that begins before 1 April 2017, there was an equivalent provision at CTA09/S459.

Where a company has an accounting period that straddles 1 April 2017, the periods falling before and after that date are treated as separate accounting periods for the purposes of determining the pre-2017 and post-2017 amounts. See {CTM04880} for further details.