Terminal Loss Relief

[invictus]

A limited company ceased to trade on 30 April 2010 and recent trading results were as follows:

p/e 30.4.2010 – loss £33300
y/e 28.2.2010 – loss £139215
y/e 28.2.2009 – loss £1726
y/e 28.2.2008 – profit £59360
y/e 28.2.2007 – profit £79495

I am getting conflicting information as to what the terminal loss relief claim should be.

The maximum TLR is p/e 30.4.2010 £33,300 + y/e 28.2.2010 £116013 (10/12 x £139215) = £149313

Is the TLR – against y/e 28.2.08= £59,360-£1,726 = £57,634 PLUS y/e 28.2.07 £79,495 = £137,129, or

Is the TLR – against y/e 28.2.08= £59,360-£1,726 = £57,634 PLUS y/e 28.2.07 £66,246 (£79495 x 10/12) = £123,880

But, maximum TLR for y/e 28.2.2010 is £116,013, so the above would be incorrect as you have to take y/e 28.2.2010 first in a TLR claim, so the TLR is restricted to £116,013. Is this correct? So £33,300 of p/e 30.4.2010 is unrelieved?

Any thoughts welcomed.

[robbob]

Without reading this technical guidance in full i am not sure if it may answer the question.
Apologies if it doesn't.
http://www.hmrc.gov.uk/pbr2008/loss-relief-583.pdf

[Incredulum]

You chose nice easy figures, didn't you. Therefore I cannot really be bothered to read it and check your calculations, sorry but you're not paying me enough!



But I'm not sure what you mean by this, perhaps you would justify the basis for your restriction.

as you have to take y/e 28.2.2010 first in a TLR claim, so the TLR is restricted to £116,013. Is this correct?

[invictus]

Thank you for your replies.
Inceredulum - according to the example given by HMRC CTM 4530 .... relief for loss of earlier 'proportionate' period must be given before loss of later period.... ref link http://www.hmrc.gov.uk/manuals/ctmanual/ctm04530.htm

[Incredulum]

Thanks.

Terminal loss relief is one of those things that doesn't often happen. You are right that there is a restriction. It all hangs on the wording of 393A(1) where it says "subject... to any relief for an earlier loss".