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Closing Ltd - Terminal Loss Relief

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    Closing Ltd - Terminal Loss Relief

    I'm closing my Ltd next month - one man band contractor, no accountant, trading 10 years.

    Current year - income minimal, salary paid out of retained profits so a loss for the year of about £10K
    Previous 3 years paid small salary and then pension contributions so Corporation tax was only a few hundred PA.

    Can I offset my losses for the current year against the Corporation tax already paid with this Terminal Loss Relief thingy?

    Terminal Linky

    Nice if I can, no biggy if not.

    If I can, given that the company will be closed, will they refund it to me personally?

    Ta for any advice!

    #2
    What losses have you incurred?

    http://forums.contractoruk.com/accou...y-pension.html
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Have you asked your accountant?*





      * ©NLUK
      The greatest trick the devil ever pulled was convincing the world that he didn't exist

      Comment


        #4
        Originally posted by LondonManc View Post
        Have you asked your accountant?*





        * ©NLUK
        I'm closing my Ltd next month - one man band contractor, no accountant, trading 10 years.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post
          There's the problem then. Ask *an* accountant.
          The greatest trick the devil ever pulled was convincing the world that he didn't exist

          Comment


            #6
            Originally posted by northernladuk View Post
            Good link NLUK - ta

            "If not terminal loss may help, but there would have to be evidence that co was still trading in part of the final (current?) accounting period, eg still actively seeking contracts even if no work was done."

            As I had some income from a short term contract and also evidence of being available and looking for contract work during the current period, it looks like it might be worth trying a claim.

            Comment


              #7
              Originally posted by ctdctd View Post
              Good link NLUK - ta

              "If not terminal loss may help, but there would have to be evidence that co was still trading in part of the final (current?) accounting period, eg still actively seeking contracts even if no work was done."

              As I had some income from a short term contract and also evidence of being available and looking for contract work during the current period, it looks like it might be worth trying a claim.
              When an accountant comes on don't forget to ask if trying this might increase any chances of an investigation against the benefit of doing it
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by northernladuk View Post
                When an accountant comes on don't forget to ask if trying this might increase any chances of an investigation against the benefit of doing it
                Closed company if they do - and are they going to bother coming after an individual for a few hundred squid?

                Especially when the rules seem to suggest a claim is valid!

                Comment


                  #9
                  Can you not just do a "normal" loss carry back, ie to the previous year? Ie did you make a £10k+ taxable profit last year? If so, you should be able to offset the current year loss against that, without it using terminal loss relief.

                  Assuming you can get it so you're due a refund, the refund would be due to your company, not you personally. So firstly that means they'd be highly unlikely to physically pay it to you personally. Secondly it means whilst it may be extra "free" money for your company, it's more money for you to take out at the end, so potentially personal tax consequences of that. Depends a bit whether dividend or perhaps you're getting CGT treatment on closing funds.

                  Comment


                    #10
                    Originally posted by Maslins View Post
                    Can you not just do a "normal" loss carry back, ie to the previous year?

                    Assuming you can get it so you're due a refund, the refund would be due to your company, not you personally. So firstly that means they'd be highly unlikely to physically pay it to you personally.
                    Taxable profit for last year only £1K so the three years carry back for Terminal Loss sounds better.

                    Would be a pain to have to keep company open just for a possible refund though.

                    Remaining retained profits will be withdrawn as a capital distribution as well under my personal CG tax allowance.

                    Comment

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