Corporation Tax Act 2009 section 1217SC

Terminal losses

Section 1217SC sets out how terminal losses arising when a company ceases a separate orchestral trade are treated, and the circumstances in which such losses can be transferred to another trade or surrendered to a group company.

• When a company ceases a separate orchestral trade and has unused losses that could have been carried forward, those losses become "terminal losses" that may be redirected rather than lost entirely.
• The company can elect to treat all or part of the terminal loss as a carried-forward loss against the profits of another separate orchestral trade it is already carrying on at the time of cessation, starting from the first accounting period after the cessation.
• Alternatively, the company can surrender all or part of the terminal loss to another company in the same group (for group relief purposes), provided that other company is carrying on its own separate orchestral trade at the time of cessation.
• Any loss deduction made under these terminal loss provisions is excluded from the corporate loss restriction rules that normally cap the amount of carried-forward losses that can be set against trading profits.