Corporation Tax Act 2010 section 357TH

Terminal losses

Section 357TH adapts the terminal loss rules in section 1216DC of CTA 2009 so that they work correctly within the Northern Ireland corporation tax regime, ensuring that Northern Ireland losses retain their character when transferred or carried forward.

• When a company ceases a qualifying trade, any remaining unrelieved losses are treated as terminal losses, which may be carried forward or transferred to another trade or company.
• If a company elects to treat all or part of a terminal loss as a loss carried forward from another of its own trades, and that terminal loss is a Northern Ireland loss, the carried-forward loss retains its status as a Northern Ireland loss.
• If a company claims to treat all or part of a terminal loss as a loss carried forward by a different company, and that terminal loss is a Northern Ireland loss, the carried-forward loss in the hands of the other company is likewise treated as a Northern Ireland loss.
• The distinction matters because Northern Ireland losses are subject to the Northern Ireland rate of corporation tax rather than the main UK rate, so preserving their classification ensures the correct tax treatment is applied.