United Kingdom corporation tax loss relief

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United Kingdom corporation tax loss relief rules are complex. United Kingdom corporation tax charges income and gains that fall within certain headings, all of which are defined by statute. Different loss relief rules apply to each separate heading.

Case I of Schedule D[edit]

This Case covers trading profits arising from a UK trade. Case I losses are calculated in the same way as trading profits1.

A company2 that is part of a group or a consortium may group relieve its Case I losses in excess of the other taxable profits arising in the company in that period, provided there is a group or consortium company with sufficient taxable profits to accept that group relief.

A company may elect to set the Case I losses arising in an accounting period against other taxable profits arising in the period3. If there are still unutilised Case I losses that arose in that period, a company may elect to carry these back against its taxable profits of the last 12 months3. Where a trade ceases, the company may elect to carry back its Case I losses arising in the last 12 months of the trade against its taxable profits arising in the preceding 36 months4.

Any Case I losses unutilised in a period are automatically carried forward to be utilised against the next Case I profits arising from the same trade4.


  • 1 Except capital allowances cannot be used to increase a Case I loss for a life assurance business, other than a Case I loss carried forward. There are also other provisions that may restrict the utilisation of Case I losses of a life assurance company have been calculated.
  • 2 Other than a dual-resident investing company or an open-ended investment company
  • 3 Except for taxable profits arising in a ring-fenced oil or gas extraction trade, or against taxable profits of a life assurance business that are not taxed at shareholder rates.
  • 4 Except that unutilised Case I losses arising in a life assurance business taxed on the I minus E basis before the accounting period that included 31 December 2002 could only be carried forward for limited purposes.