Corporation Tax Act 2010 section 45G

Section 45F: accounting period falling partly within 3 year period

Section 45G deals with how terminal loss relief under section 45F is restricted when an accounting period straddles the boundary of the 3-year carry-back window.

• Where a company ceases a trade and an earlier accounting period only partly falls within the 3-year carry-back window, that earlier period is called the "straddling period"
• Deductions from the trade profits of the straddling period under section 45F are capped at the overlapping proportion of those trade profits
• The combined deductions from both trade profits and total profits of the straddling period are capped at the overlapping proportion of those total profits
• The overlapping proportion is the fraction of the straddling period that falls inside the 3-year window, compared to the full length of that period