Tx notes fa22 Final

June 2023 to March 2024 exams
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1.2. Non-Trading losses 
(a)
Property Business losses:
Property Business losses are relieved by:
(i)
Setting them o
ff
against total profits before deduction of qualifying charitable donations 
of the current period. This relief is automatic and then,
(ii)
By carrying them forward to set o
ff
against any part of future total profits.
(iii)
Group relief - see chapter 22
(b)
Capital losses:
Capital losses are relieved against:
(i)
Current year capital gains, then carried forward to set o
ff
against
(ii)
Net capital gains in future accounting periods.
2. Trading losses 
2.1. Current period relief 
The loss may be relieved against Total Profits before deduction of qualifying charitable donations in 
the period that the loss arose. The loss must be applied in full if claimed as no partial claims are 
permitted.
The relief must be claimed within 2 years of the end of the accounting period in which the loss is 
made.
 
Example 1
 
 
A Ltd had the following results for the year ended 31 March 2023:
Show how current year relief would be obtained in the year ended 31 March 2023 
2.2. Carry back relief 
(a)
Having first relieved the trading loss in the accounting period of loss, only then may any 
remaining trading losses be carried back against Total Profits before deduction of qualifying 
charitable donations of the preceding 12 months. The loss must be applied fully against the 
available profits. 
(b)
Partial claims, for example to leave su
ffi
cient profit to cover the qualifying charitable donation, 
are not allowed. These claims may therefore result in no tax relief being achieved for the 
qualifying charitable donations. The relief must be claimed within 2 years of the end of the 
accounting period in which the loss is made.
£
Trading loss
(45,000)
Interest receivable
20,000
Chargeable gain
50,000
Qualifying charitable donations
15,000

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