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Why there is a need to calculate terminal loss for the last 12 months ? and why not just for the losses incurred after second last financial statements were prepared to the date of cessation ?
E.g if the biz prepared its FS every year on 30 sep.
It stopped trading on 30 june 2018 and incurred a loss of 2000.
Its total income in tax year 17/18 (i.e for the year ended 30 sep 2017) was 50000.
my ques is ..why we just dont take the terminal loss as 2000 for 9 months losses (from 1 oct2017 to 30june2018)
but why we consider last 12 months ..i.e 1july2017 to 30sep2018 ??because profit of 50000 has already been considered as total income for the tax year 17/18 ..why we are readding the profits of 3 months (july17 – sep17) to terminal loss ?
Question 2.
why only trading income of previous three years is allowable to set off terminal loss.. why not total income ?
What if there ain’t any trading income for last three years and only other income are available ?There is no question of “why”! They are rules that have been decided upon and you must simply follow the rules! You could no doubt come up with “another idea” but you are not the UK government – they decided on the rules and regulations – you must learn them and apply them correctly!
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