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CTA10\S37

CTA10\S37 (augmented by S39, S40, S41 & S44, formerly ICTA88\S393A) allow a company incurring a loss in a trade to set that loss against profits of the same AP of loss and of earlier APs during which the trade was being carried on.

In general, a loss may be carried back to be set against profits of the previous year. Longer carry back periods apply when the loss arises

• from allowances for abandonment expenditure or for general decommissioning expenditure, or
• in the last twelve months of the company’s trade.

Losses arising from general decommissioning expenditure or abandonment relief can be carried back and set against all profits of earlier APs, for a period of three years (CTA10\S40) - see OT21060 and OT28020).

For APs beginning on or after 12 March 2008, the carry back period for relief for general decommissioning losses and terminal losses was extended. »Ê¹ÚÌåÓýappse losses can now be carried back and set against ring fence profits of previous AP’s back to 17 April 2002 (CTA10\S42 - see OT21065 and OT28000).

Non-ring fence losses

Where a company carrying on a petroliferous trade incurs a non-ring fence loss, CTA10\S304(1) provides that that loss cannot be allowed against ring fence profits for purposes of CTA10\S37.

Ring fence losses

»Ê¹ÚÌåÓýappre is no such restriction on ring fence losses which can, as with other losses, be carried back and allowed generally against profits including non-ring fence ones.