188体育

CTA10/S45, S269ZF

Company has more than one trade

In some cases a company may have more than one trade. Where this is the case, the company is still only required to calculate a single relevant maximum for trade profits. There is no need for the company to calculate separate relevant maxima for the separate trades.

For example, a company in a group has two trades: Trade A and Trade B.

In its accounting period ending 30 April 2018, a company has

• Profits in trade A of 拢30 million,
• Profits in trade B of 拢8 million,
• Pre-1 April 17 streamed losses of trade A, carried forward under CTA10/S45, of 拢40 million, and
• Pre-1 April 17 streamed losses of trade B, carried forward under CTA10/S45, of 拢70 million.

The company has no in-year reliefs and no deductions allowance (CTM05120). The group has allocated all of its deductions allowance to other companies.

The company鈥檚 relevant trading profits are therefore 拢30 million plus 拢8 million = 拢38 million, since there are no in-year reliefs and no deductions allowance to deduct at the relevant steps of the calculation (CTM05070, CTM05080).

The company鈥檚 relevant maximum for trading profits is therefore 50% x 拢38 million = 拢19 million.

There is no need to calculate any other relevant maxima because all of the company鈥檚 restricted losses are streamed trading losses carried forward for relief against profits of the same trade only.

The company could use losses of trade A up to this full 拢19 million amount, since these losses can only be set against profits of trade A and trade A has profits over 拢19 million. If the company used a full 拢19 million of its losses of trade A, it would not be able to use any of its losses of trade B, since there would be no capacity remaining in the relevant maximum.

Alternatively, the company could use losses of trade B up to 拢8 million. These losses can only be set against profits of trade B, and trade B has profits of 拢8 million only. If the company used 拢8 million losses of trade B, it would have remaining capacity of 拢11 million in its relevant maximum, to use losses of trade A.

The company is not forced to use losses of one of the trades in priority to the other, or to use them in any particular proportions. The company cannot use these losses in ways that contravene the usual rules for streamed losses, and so can use no more than 拢8 million of its losses of trade B. The sum total amount of streamed losses of the two trades that the company deducts in this period cannot exceed the relevant maximum for trading profits. However, within those constraints, the company can choose what amount of each loss to use.