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HMRC internal manual

Venture Capital Schemes Manual

CVS: loss relief: claims

FA00/SCH15/PARA68 - 70 & PARA72

The qualifying investing company must claim the loss relief and may claim for the allowable loss to be set against income:

  • of the accounting period in which the loss arises,

and, if the amount of the allowable loss is not wholly relieved in this way:

  • of accounting periods ending in the period of 12 months immediately before the accounting period in which the loss is incurred.

Where only part of an accounting period falls within that 12 month period a proportionate part of the income of that accounting period can be set against the loss.

The claim must be made within 2 years after the end of the accounting period in which the loss is incurred. The claim must relate to the whole of the allowable loss. Any amount remaining after loss relief has been allowed in full can be set off against chargeable gains (of the accounting period in which the loss was incurred or later) in the usual way.

Loss relief must be set off against the qualifying investing company’s income before any other deductions from, or set off against, its profits of any description, and before any deduction for amounts treated as reducing those profits. If for an accounting period a company claims loss relief in respect of two or more disposals, relief for a loss arising from an earlier disposal is given before that arising from a later disposal. Where loss relief has been obtained, no other relief is available for that loss.

FA00/SCH15/PARA72 allows you to make any necessary corporation tax adjustments where loss relief is obtained, and where it is claimed but not obtained or not obtained in full.