Corporation Tax Act 2009 section 457

Basic rule for deficits: carry forward to accounting periods after deficit period

Section 457 sets out the basic rule for carrying forward non-trading loan relationship deficits to future accounting periods, including what happens to amounts not otherwise claimed or surrendered.

• The default rule is that a non-trading deficit on loan relationships must be carried forward and set against the company's non-trading profits in subsequent accounting periods.
• The carry-forward rule does not apply to any part of the deficit that is either surrendered as group relief or claimed against profits of the deficit period or earlier periods.
• Any carried-forward amount not subject to a specific claim must be automatically set against the company's non-trading profits for the very next accounting period, reducing those profits accordingly.
• If the company is a charity at the end of the deficit period, the deficit cannot be carried forward or surrendered as group relief at all.