Sarah Bradford outlines the tax relief available to business owners for terminal losses.
The tax legislation provides various reliefs for business losses, both for income tax and corporation tax purposes. The provisions include a specific relief for terminal losses.
In the current climate, terminal loss relief is likely to be of particular relevance to businesses which found themselves struggling as a result of the Coronavirus pandemic before making the difficult decision to cease trading.
Income tax relief for terminal losses
For income tax purposes, relief is available for an individual, partner or trustees who make a terminal loss in a trade, profession or vocation which is permanently discontinued. This specific relief allows the taxpayer to claim relief for the terminal loss against: