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It’s a squeeze
Key points
- Corporate capital loss restriction legislation introduced by Finance Bill 2020.
- The corporate income loss restriction limited relief to 50% of profits.
- A £5m deduction allowance applies but this must be divided between the capital and income loss regimes.
- A new ‘relevant maximum’ is introduced for carried-forward capital losses.
- The steps to calculate the relevant profits and allowable relief.
- Accounting periods straddling 1 April 2020 must be split.
- SMEs may find their deduction allowance is used by larger group members.
Finance Bill 2020 Sch 3 contains the draft legislation (tinyurl.com/s79cewo) for the corporate capital loss restriction (CCLR). This should not come as a shock to most given that the government’s intention to introduce these rules was announced ...
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