COM52021 - Claims/reliefs: CTSA claims frameworks: claims and elections involving more than one AP Examples

Example 1 

K Ltd makes a trading loss in its AP ended 31 December 2022 and carries this back to set against its other profits in its AP ended 31 December 2021. 

The claim relates to the AP ended 31 December 2022.  It also affects the AP ended 31 December 2021. 

Paragraph 58(2) applies if a company makes a claim or election which either relates to or affects an AP for which it has already made a return, and where the claim could be made or given effect to by amendment of that return. 

In cases like this, the claim or election is treated as an amendment of the return and is covered by the provisions that apply to amendments generally. 

 

Example 2 

L Ltd makes a trading loss of £100,000 in its AP ended 31 March 2022.  It has other profits of the same AP of £40000. 

It made profits of £70,000 in its AP ended 31 March 2021. 

It claims relief for the loss against the profits of these two APs.  The claim relates to the AP ended 31 March 2022.  It affects both that AP and the AP ended 31 March 2021. 

L Ltd makes its claim to loss relief by including it in its return for the AP ended 31 March 2022.  The company will also give partial effect to the claim by setting off £40000 of the loss against its other profits in its self assessment for that AP. 

If L Ltd is still able to amend its return for the AP ended 31 March 2021, it will give effect to the carry-back element of the claim by amending its return and self assessment for this period. 

If L Ltd cannot amend its return for the AP ended 31 March 2021, the carry-back element of the claim will fall within Schedule 1A Taxes Management Act and you will give effect to the claim by discharge or repayment. 

Please note that:  L Ltd will probably indicate in the computations that form part of its return for the AP ended 31 March 2022 that its claim for loss relief includes a carry-back to the AP ended 31 March 2021.  The company should show on its company tax return if the return gives rise to a repayment for an earlier period. 

How you handle the carry-back claim depends on whether or not the time limit for amending the return for the AP ended 31 March 2021 had expired when the claim was made (that is, when the return for the AP ended 31 March 2021 was made).  If the time limit

  • has not expired - treat the claim as an amended return for the AP ended 31 March 2021
  • has expired - treat the claim as made under Schedule 1A