Suppose a trader makes a Year 4 trading loss (which qualifies for opening years relief). They claim opening years loss relief, carrying the loss back against total income of the previous three tax years on a FIFO basis.
If, after making the opening years relief claim, there is still some unrelieved trading loss remaining (for example, because of the loss relief cap or insufficient total income in the earlier years), can that remaining loss be set off against chargeable gains of the current tax year?
Or is it necessary to first claim the current year and/or previous year sideways loss relief (against total income) before any remaining loss can be relieved against chargeable gains?
Ask the Tutor ACCA TX-UK
Relief of trading profits against capital gains and opening years loss relief
20d ago#1If a claim is to be made against gains, a claim against income of that same tax year must be made first.
So a CY claim followed by a claim against CY gains and/or a CB (previous year) claim against income followed by a claim against CB (previous year gains.
A taxpayer has a trading loss in the current tax year.
They first claim relief against the current year's total income. The remaining loss is then carried back and claimed against the previous year's total income. After both income claims, there is still some unrelieved trading loss.
Can the taxpayer choose to set this remaining loss against either the current year's chargeable gains or the previous year's chargeable gains, or is the remaining loss required to be relieved only against the previous year's chargeable gains because the last income claim was made against the previous year?
19d ago#3If they've made a claim against income in both years, they can make a claim against gains in both years and they can do this in any order.
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