Section 39 — Corporation Tax Act 2010: Terminal losses: extension of periods for which relief may be given

Terminal losses: extension of periods for which relief may be given 39 1 This section applies if—

a a company ceases to carry on a trade, and b the company has made a terminal loss in the trade.

2 Sections 37(3)(b) and 38(1) and (3) have effect in relation to the terminal loss as if the references to 12 months were references to 3 years.

3 The following are terminal losses made in the trade—

a the whole of any loss made by the company in the trade in an accounting period that begins during the final 12 months, and b the overlapping proportion of any loss made by the company in the trade in an accounting period that ends, but does not begin, during the final 12 months.

4 The overlapping proportion is the same as the proportion that the part of the accounting period falling within the final 12 months bears to the whole of the accounting period. 5 “ The final 12 months ” means the period of 12 months ending when the company ceases to carry on the trade.

6 This section is subject to section 41.