Corporation Tax Act 2009 section 1056

Amount of trading loss which is "unrelieved"

Section 1056 defines how to calculate the amount of a trading loss that qualifies as "unrelieved" for the purposes of determining an SME's surrenderable loss under the R&D tax relief provisions.

• The unrelieved amount of a trading loss is the original loss reduced by any relief already obtained or available against the same period's total profits, any other relief obtained in respect of the loss (including carry-back relief to earlier periods), and any losses surrendered to group or consortium members.
• Relief that the company could have claimed against the same period's total profits counts as a reduction, even if the company chose not to make the claim.
• Losses brought forward from earlier accounting periods or carried back from later accounting periods are excluded from this calculation entirely.
• The resulting unrelieved amount represents the portion of the trading loss that may potentially be surrendered in exchange for a payable R&D tax credit.