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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4779
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hi,i was wondering if the following loss reliefs for companies

Customer Question


i was wondering if the following loss reliefs for companies were made before or after gift aid donations in the corporation tax computation:

- s.459 (current year)
-property loss
-terminal loss relief

Submitted: 4 years ago.
Category: Tax
Expert:  bigduckontax replied 4 years ago.
Hello, I am Keith and ready to assist you with your problems. Here is HMRC Guidance in the matter:

When a company makes a qualifying donation to a charity, the amount paid can be set against profits for Corporation Tax purposes. The company can make a claim in its Corporation Tax Self Assessment (CTSA) return to set the amount of the donation against its taxable profits, to the extent that it reduces the chargeable profit to nil.

Charitable donations cannot be used to create or add to a company’s trading losses, nor can excess charitable donations be carried forward or back although they may be surrendered as group relief.

The donor company should keep normal accounting records to support entries on its CTSA return along with any other relevant documentation for example, correspondence with the charity in relation to the donation such as a ‘thank you’ letter.

Non-resident companies within the UK Corporation Tax regime can also make Gift Aid donations; this will generally apply to companies trading in the UK through a branch or agency. Non-resident companies that are only chargeable to UK Income Tax in respect of income arising in the UK cannot get Gift Aid relief on donations to charities because Gift Aid donations are only deductible against Corporation Tax profits.

As you can see as these donations cannot be used to create or add to a company’s trading losses the answer is obvious; After!
Customer: replied 4 years ago.
Relist: Other.
the answer is not specific to my question and assumes that all loss reliefs are done after gift aid donation when i know perfectly well that s.37 for example is done before.

i would like someone to give me a specific and accurate answer.
Expert:  bigduckontax replied 4 years ago.

With respect, I have given you an accurate answer to your specific question. As gift aid donations cannot be used to increase losses for CT purposes it stands to reason that they are better included after all other reliefs are applied. It will then be immediately obvious whether they can be used at all; if not then they can be carried forward.