CFM32070 - Loan relationships: non-trading deficits: claims for set-off against profits of an earlier period

CTA09/S463B(1)(b) and S463E

Claim to carry back deficit to previous accounting periods

The company can make a claim under S463B(1)(b) to carry back its non-trading deficit to the preceding 12-month period.

The non-trading deficit is set against non-trading profits of the preceding 12 month period that would otherwise be charged. These non-trading profits can arise from non-trading loan relationships or derivative contracts.

If there is more than one accounting period that falls within the preceding 12 months period, the non-trading profits from the later period must be utilised before the non-trading profits from the earlier period. If the earlier accounting period falls within but begins before the start of this 12-month period, the non-trading profits available are apportioned accordingly. These rules work in the same way as for trading losses carried back - see CTM90600

Although the legislation refers to a claim to 바카라 사이트˜all or part바카라 사이트™ of the deficit, S463E(2) specifies that the claim must be limited to the smaller of

  • the profits available for relief
  • the total deficit (to the extent it hasn바카라 사이트™t already been surrendered as group relief), less any amounts claimed under S463B(1)(a) to set against profits of the same period.

Interaction with other reliefs

The relief for carried back non-trading deficits is given after:

  • relief for any non-trading deficit which arises in that 12 months period
  • relief for any non-trading deficit brought forward to that 12 months period from an earlier accounting period
  • relief in respect of any qualifying charitable donations under CTA10/PT6
  • relief under CTA10/S37 (loss deducted from total profits of the same or an earlier accounting period)

If the company is a company with an investment business, the following reliefs also get priority. Any

  • deduction for capital allowances
  • deduction for management expenses under CTA09/S1219

  • non-trading deficit carried back from a later period (CTA09/S459(6)(b)).

    See CFM32080 for an example.

Pre-2017 deficits

For non-trading deficits that arose in an accounting period before 1 April 2017, companies there was a similar provision to carry back non-trading deficits under CTA09/S459(1). The conditions for such a claim are set out in CTA09/S462.

Where a company has an accounting period that straddles 1 April 2017, the periods falling before and after that date are treated as separate accounting periods for the purposes of determining the pre-2017 and post-2017 amounts. See CTM04880 for further details.