New Start Up - 50 Or 40 Percent Relief
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Published on 5th
any new business starts to trade and creates a
loss it has the ability to carry the first three years of losses back
earlier total income.
a stud situation where it is accepted that it can
take 11 years in which to make a profit the first three years can
some quite heavy losses. These
have arisen through the problems and concerns of repairs to the
opposed to improvements and some writing down of stock where stock
fallen and just general running expenses where there is little income
stock has not been sold.
question that a high earner who also runs a stud
has to consider is should they carry back the loss and achieve 40% tax
or set it off against current earnings and achieve 50% tax
relief? Previously there was no
such dilemma and it
was normally good housekeeping or general acceptable policy to carry
losses to the furthest point so that all tax paid subsequently was
for offset if needed.
raises an issue concerning loss utilisation.
whole issue of stud losses is an important area
and it is key to keep a loss memorandum so that the ability to claim
losses against other income is protected.
action plan is to look at the earnings for the
past three years and to see how these can best be utilised against the
earnings. It is
also essential to
predict future losses to see that there will be enough income to offset
50% relief is taken in the current year.
About the Author
Article supplied by Julie
Butler F.C.A. Butler & Co, Bennett House, The Dean, Alresford, Hampshire,
01962 735544. Email;
Julie Butler F.C.A. is the author of Tax
Farm and Land Diversification ISBN: 0754517691 (1st
ISBN: 0754522180 (2nd edition) and Equine
Tax Planning ISBN:
third edition of Tax
Planning For Farm and Land Diversification will be published
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Article Published/Sorted/Amended on Scopulus 2010-10-22 10:48:13 in Tax Articles