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I might be looking too much into this but is terminal loss relief unfair on the tax payer?
Consider open tuition example 7 on page 54.
The tax payer has profits of 12,000, 10,000 and a loss of (20,000) plus overlap profits of 500.The terminal loss is calculated as (18,000) so do they lose out on relief for the remaining 2500?
It might be beyond the syllabus or I might be overlooking something it just got me thinking that’s all.
May I take this opportunity to thank you for the wonderful lectures and notes and all your help over the last 6 months. I couldn’t have done it without you.
Regards
Hi Robert, it is beyond your exam needs but the remaining loss is not lost it is simply not available within the specific terminal loss relief claim, the remaining 2500 would be available to be set off against the total income of the year of loss 2014/15 and/or the preceding tax year 2013/14. If you were working the assessments for the final 2 tax years it would be as follows:
Assessments
2013/14 CYB) A/C y/e 31 July 2013 10,0002014/15 9 Months to 30 April 2014 (20,000)
Overlap profits (500) (20,500) NilOn this basis if the terminal loss relief claim is made for 18,000 then that leaves 2500 loss available for use against total income as stated above.
Your thanks are very much appreciated and I hope your efforts are very soon rewarded – good luck in your exams!
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