Where a loss is made in the final year of trading, i.e. the 12 months before the date of discontinuance, unless relief has already been given for that loss, it may be carried back and set against the profits of the same trade.

Relief covers the year of cessation and the three previous years. Relief is given as far as possible from the assessment for a later rather than an earlier year.

If the profits are insufficient for setting off the loss, then any interest or dividends arising in that year which would be trading receipts but for the fact that they have already been taxed will be treated as profits and relief will be given accordingly by repayment or otherwise.

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