ACCA F6 四川大学工商管理学院 课件Chapter 10.pptVIP

Chapter 10 Trading losses 1 Losses 2 Carry forward trade loss relief 3 Trade transferred to company 4 Trade loss relief against general income 5 Losses in the early years of a trade 6 Terminal trade loss relief 1 Losses Trade losses may be relieved against future profits of the same trade, against general income or against capital gains. Losses A loss is computed in exactly the same way as a profit. If there is a loss in a basis period, the taxable trade profits for the tax year based on that basis period are nil. The rules in this chapter apply only to individuals, sole trader or partner. Trade loss for a tax year is the trade loss in the basis period for that tax year. 2 Carry forward trade loss relief Trading losses not relieved in any other way will be carried forward to set against the first available profits of the same trade. (future trade income) 3 Trade transferred to company Where a business is transferred to a company, loss relief is available for any remaining unrelieved losses of the unincorporated business against income received from the company including dividends, interest and salary.  4 Trade loss relief against general income (total income) Relief is against total income of the tax year in which the loss arose. Notes: Relief is as deduction (before net income) in computing income tax. In addition or instead, relief may be claimed against total income of the preceding year (1 year). Trading losses relieved against capital gains Once relief is claimed against general income of a given year, taxpayer may include a further claim to set the loss against his net chargeable gains for the same year or for the previous year. The trading loss is first set against total income of the year of the claim, and then only any excess of loss is set against capital gains. This means taxpayer cannot specify the amount to be set against capital gains. The choice between loss reliefs Obtain relief as rapidly as possible Obtain relief at the highest t