Corporation Tax Act 2010 section 95

Meaning of "carry-forward losses"

Section 95 defines the five categories of losses that a company may carry forward to the next accounting period, and sets out how those losses interact with the write-off of government investment provisions.

• Carry-forward losses are classified into five types: trading and property losses (Type 1), excess management expenses (Type 2), excess capital allowances from special leasing (Type 3), surplus qualifying charitable donations available for group relief surrender (Type 4), and unrelieved capital losses (Type 5)
• An amount is excluded from a company's carry-forward losses if, before the date of the government investment write-off, a claim has already been made in respect of that amount under the trade loss relief, group relief, group relief for carried-forward losses, or special leasing capital allowance provisions
• Any claims made on or after the date of the write-off are disregarded when determining the company's carry-forward losses at the end of any accounting period
• When setting off an amount against carry-forward losses, the set-off must be applied first against Types 1 to 4, and only then against Type 5 (capital losses)