Corporation Tax Act 2009 section 1218ZDC

Terminal losses

Section 1218ZDC sets out how terminal losses arising from the cessation of a separate exhibition trade can be preserved and either transferred to another exhibition trade of the same company or surrendered to a group company carrying on an exhibition trade.

• When a company ceases a separate exhibition trade and has unrelieved losses that could have been carried forward, those losses are treated as terminal losses that can be redirected rather than lost
• The company can elect to transfer all or part of the terminal loss to another of its own exhibition trades, where it is treated as a carried-forward loss against profits of that trade 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 that is carrying on an exhibition trade — either the same exhibition or a different one — provided that group company is still trading at the point of cessation
• Any loss relief deduction arising from these terminal loss provisions is disregarded for the purposes of the corporate loss restriction rules that cap the amount of carried-forward losses a company can use against its trading profits