How does a company claim share loss relief under Corporation Tax Act 2010 section 70?

An eligible company claims share loss relief by way of a deduction in calculating its income for corporation tax purposes. The relief reduces the company's taxable income for the accounting period in which the loss arose, and may optionally be extended to earlier periods falling within the preceding 12 months.

Can share loss relief be carried back to earlier accounting periods?

Yes, a company may extend its share loss relief claim to cover previous accounting periods that fall wholly or partly within the 12 months immediately before the start of the loss period. However, the company must have been an investment company throughout each of those earlier periods to qualify for the carry-back.

What is the time limit for claiming share loss relief under section 70?

Any claim for share loss relief must be submitted within two years after the end of the accounting period in which the qualifying loss was incurred. If the company fails to submit its claim within this deadline, the entitlement to share loss relief is permanently lost and cannot be recovered.

What is the investment company requirement for carry-back of share loss relief?

A company may only carry back share loss relief to an earlier accounting period if it was an investment company throughout that entire period. It is not sufficient to have held investment company status for only part of the period; the requirement applies to the whole of each earlier period against which relief is claimed.

Corporation Tax Act 2010 section 70

Entitlement to claim

Section 70 sets out how and when an eligible company may claim share loss relief against its income for corporation tax purposes.

A company eligible for share loss relief may claim a deduction against its income for the accounting period in which the loss arose, and optionally for earlier periods falling within the preceding 12 months.
A claim against earlier accounting periods is only permitted if the company was an investment company throughout each of those earlier periods.
Share loss relief works by reducing the company's taxable income rather than being set against capital gains or other amounts.
Any claim for share loss relief must be made within two years after the end of the accounting period in which the loss was incurred.

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