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Nicola-mod, Moderator
Category: Tax
Satisfied Customers: 21
Experience:  Moderator
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I would like to know if the following loss reliefs for companies

Customer Question

I would like to know if the following loss reliefs for companies are made before or after gift aid donations in the corporation tax computation (for example i am aware that s.37 is made before gift aid donations but am not sure about the below ones). Could you please specify what is the case on each one please:

- 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 solution is obvious; After! There are 101 ways of computing CT used by accountants and many do not follow HMRC's system anyway. This way will work.
Customer: replied 4 years ago.

Thank you for your answer.


Would you kindly opt out so that I can open this question to other experts on the site.


Many thanks for your response.



Expert:  Nicola-mod replied 4 years ago.

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