Trading losses

And loss in last 12 months can b carry back for 3 years , on LIFO basis , in current 12 months we have income from other sources I.e employment then first we will adjust it in curent year or direct carry back ? Priority given to curent year or not ?

Hi Umair. firstly I assume from your reference to "other sources" of income like employment income that we are dealing with the losses of an UNINCORPORATED trader not a company. For a normal continuing business the reliefs available are to set off against total income of current tax year and / or preceding tax year with any loss remaining carried forward to set off against trading profits. There is no set order in which to use the loss other than the carry forward would be after any current or preceding year reliefs claimed. The main objective would be to achieve the highest tax saving from the use of the loss. In closing years you rightly point out the availability of terminal loss in addition to the normal current and preceding tax year claims - clearly in this situation there is no carry forward!! Again the taxpayer will decide in which order to claim the loss reliefs but remember if terminal loss relief is claimed this will set off the loss against the trading profits of the preceding 3 tax years. The lectures for this area - chapter 7 - are now available.