OT65130 - Transferable Tax History - Basic example of tracking
Company A sells its 100% holding in a field to company B and transfers its Tax history of £5000 in the sale. From the date of transfer B then has to track the profits of the field and show this alongside their tax computation.
| Year | Profit/Loss for the year | Total Net Tracked Profits |
|---|---|---|
| 1 | 1,000 | 1,000 |
| 2 | 900 | 1,900 |
| 3 | -500 | 1,400 |
| 4 | 100 | 1,500 |
| 5 | 300 | 1,800 |
If the decommissioning expenditure in year 6 was £6,000 then the total TTH activated and available for use by the buyer would be £4,200 - calculated as £6,000 less £1,800.
Details of how this activated amount can be used will be covered in loss carry back guidance.
Any losses of the TTH asset made in a year will be netted off when calculating Total Net Tracked Profits (TNTP). »Ê¹ÚÌåÓýappre are no loss rules equivalent to those for Corporation tax when calculating tracked profits.
An asset cannot make a tracked loss overall. Where the total net tracked profits would be negative, the total net tracked profits are treated as zero.