Corporation Tax (CT)

Trading losses

If a company sustains trading losses in an accounting period they can be offset as a means of a relief from tax against:

  • other trading income for the same accounting period
  • trading income for the immediately preceding accounting period.

This relief is calculated on a euro for euro basis. This means that a loss of one euro can be offset against a profit of one euro.

Value basis relief

Any unused trading losses may be offset against non-trading income, including chargeable gains, on a value basis. The tax value of trading losses is limited to 12.5%,  the standard rate of Corporation Tax.

Losses carried forward

The unused trading losses can be carried forward, without time limit, against trading income of the same trade in future accounting periods. A loss must be claimed against the first avaliable profits of the same trade.

The following example explains how a trading loss can be offset on a value basis against a non trading income.

The above provisions do not apply to companies carrying out an excepted trade. Those companies can offset a trading loss against:

  • their total profits for the same period in which the loss arose
  • and
  • their total profits of the immediately preceding accounting period.