Corporation Tax Loss Relief Case I/II Terminal Loss Relief A company may claim terminal loss relief in respect of trading losses incurred in the whole or part of the twelve month period up to the date of cessation of the trade provided such losses have not or cannot otherwise be utilised Relief for losses incurred in its last period of trading would otherwise be lost if the current and preceding periods income was insufficient to absorb the loss, as the loss could not be carried forward.

Corporation Tax Loss Relief Case I/II Terminal Loss Relief The company can claim to set that part of the loss, which falls in the final 12 months of trading against the income from the same trade in the preceding 36 months.

Corporation Tax Loss Relief Restriction of loss relief due to late filing of CT returns CT returns are required to be submitted by 23rd day of the ninth month after the end of the accounting period Where the return is filed less than two months after the filing date, a 25% restriction applies to loss reliefs subject to a maximum restriction of €31,740

Corporation Tax Loss Relief Restriction of loss relief due to late filing of CT returns Where the return is filed more than two months after the filing date, a 50% restriction applies to loss reliefs subject to a maximum restriction of €158,720

Corporation Tax Loss Relief Charges Payments such as certain annual interest payments, patent royalties and other annual payments are Charges and are not deductible when computing tax adjusted Case I profits. Charges are included in the CT computation on a paid basis Distinction is made between Trade Charges and Non-Trade Charges

Corporation Tax Loss Relief Charges Trade charges are payments incurred wholly and exclusively for the purposes of a company’s trade (eg patent royalties) Trade charges are deducted from trading income Excess trade charges can be used against investment income and chargeable gains on a value basis

Corporation Tax Loss Relief Charges Trade charges unused in the current year can be carried forward as trading losses. Trade charges unused in the current year cannot be carried back.

Corporation Tax Loss Relief Charges Non-trade charges are payments incurred that are not wholly and exclusively for the purposes of a company’s trade Non-trade charges are deducted from total profits. Non-trade charges cannot be carried forward and cannot be carried back.

Corporation Tax Loss Relief Charges Therefore, non-trade charges that are not used in the current accounting period are lost.

Corporation Tax Loss Relief Case V Rental Losses A company may carry back Case V rental losses against rental income in the immediately preceding accounting period of equal length. Rental losses can only be used against rental income. Any losses that cannot be used in the preceding accounting period can be carried forward for use against future rental profits.

Corporation Tax Loss Relief Excess Case V Capital Allowances Deducted from profits of the current accounting period (against other non Case V income), and/or Deducted from profits of the immediately preceding accounting period of equal length, and/or Carried forward indefinitely again Case V income in future accounting periods