Corporation Tax Act 2010 section 45F

Terminal losses: relief unrestricted by Part 7ZA and 7A

Section 45F provides a form of terminal loss relief that allows a company to carry back unrelieved trade losses when it ceases to trade, setting them against profits of earlier periods within a three-year window.

• Where a trade loss has been carried forward but remains unrelieved in the accounting period in which the company ceases to trade, the company may claim to set that unrelieved amount against profits of the terminal period and of earlier periods falling within the three years ending with the terminal period.
• The carry-back cannot reach the period in which the loss originally arose, any period before it, or any period beginning before 1 April 2017.
• If the loss was originally carried forward against total profits, it is set against total profits on carry-back; if it was carried forward against trade profits only, it is set against trade profits only on carry-back.
• The claim must be made within two years of the end of the terminal period, unless HMRC allows a longer period.