Hello, I'm Keith and happy to help you with your question. Trading losses may be brought forward and used to offset trading profits in the same trading environment. HMRC wording is that they may be used against profits from the 'same trade.' There is no time limit involved. I am aware of a company which has been steadily using up losses year by year from many years before. HMRC also advise that there is no need to claim such losses, they will be applied automatically when you make the annual CT600 return. However, I would suggest, as always, that you keep an eye as to what they are doing. This answer assumes that the new company bought in has not been made part of a company group.
So it can't be grouped ?
Company A purchases Company B.
Company A is trading as a licensed Bar/restaurant which Company B used to do.
Company B has large brought forward losses supported by a ditrector's guarantee but has not traded for ten or so years
How does Company A "absorb" those losses to take advantage of the tax loss situation if not allowed to group does it just buy the shares and thereby aquire the losses
Sorry still not getting my head round it!
If company A pays shareholders of Company B an agreed price then Company A inherits the brought forward loss and the Directors loan Account.
How does company A get rid of the Directors loan and utilise the tax
company B's Director does not require repayment of the loan