8.4.1 How relief is given

If a company ceases to trade, and makes a trading loss in its final 12 months of trading, that ‘terminal loss’ can be carried back to APs ending within the three years before the start of the loss-making AP. This relief is an extension of relief under s. 37, which is outlined above at 8.3. The loss is set off against total profits and is set against later periods before earlier periods. The loss must be set against any other profits in the AP of cessation before it can be carried back.

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