Corporation Tax Act 2010 section 45D

Application of section 45B if loss remains after application of section 45A

Section 45D provides a fallback mechanism so that when a carried-forward trade loss cannot be set against total profits under section 45A (because the conditions in section 45C are not met), the unrelieved portion of the loss is instead carried forward and set against profits of the same trade under section 45B.

• Where a trade loss has been carried forward to a later period under section 45A but some or all of it remains unused — neither deducted from total profits nor surrendered as group relief for carried-forward losses — it does not simply disappear
• If the company continues to carry on the same trade in the next accounting period (the "further period"), but the section 45C conditions for re-applying section 45A are not met, section 45D directs the loss into the section 45B route instead
• Under section 45B, the unrelieved loss is automatically set against profits of that same trade in the further period, rather than against the company's total profits
• The company may elect under section 45B for part or all of the loss not to be relieved against the trade profits of the further period, preserving flexibility over how and when the relief is used