CIRD60085 - Remediation of contaminated land: tax credit: qualifying land remediation loss: restriction of losses carried forward

Amount of loss carried forward

The company's trading loss, or Schedule A loss, carried forward and set off against profits from those sources in later accounting periods is reduced by the amount of the loss surrendered (ICTA88/S392A and ICTA88/S393), (FA01/SCH22/PARA17).

Amount of the loss surrendered

The amount of the loss surrendered is:

• where the maximum amount of land remediation tax credit is claimed (see CIRD60090), the whole of the 'qualifying land remediation loss' (see CIRD60080 for definition) for that accounting period, or
• where the amount of land remediation tax credit claimed is less than the maximum amount that could be claimed, a corresponding proportion of the qualifying land remediation loss for that accounting period.

(FA01/SCH22/PARA17 (5)).

Example

Company A has a trading loss of £100,000 in an accounting period, of which £75,000 is a qualifying land remediation loss. It has no other income or gains in the accounting period, claims a payable tax credit of £8,000 and makes no other loss or group relief claims for the period.

The amount of land remediation tax credit payable equates to a qualifying land remediation loss of £50,000 (£50,000 x 16% = £8,000 - see CIRD60090). The loss available to carry forward is therefore £50,000 (£100,000 less £50,000 qualifying land remediation loss surrendered).