tax benefits — OpenTuition Forums

Kkhalid71113y ago

I m confused that if there is loss in one period , we have the right to carry forward it in next year to claim, in that period of loss can we claim capital allowances? for refrence i faced this problem in december 2011 attempt Q1 of Tramont co.
Tax benefit 4000 every year can we wrte it in year 1 or it would be treated in year 2 and how it would be treated .
please solve my problem.

John MoffatTutor13y ago#1

We always assume that the company is already making profits and is therefore already paying tax.

If a new project makes a 'loss' then it simply means that the company as a whole makes less profit and therefore pays less tax. So a 'loss' from the project results in a tax saving.

There is never any question of the company as a whole making a loss, and therefore loss relief is irrelevant.