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TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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, Can i know how to treat the /F overlap period profit

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Can i know how to treat the B/F overlap period profit in the current tax return if this tax year is the last year to declare the profit/loss from the connected business related to overlap period profit ?

Are you saying that the business that has overlap relief is or has ceased?
Customer: replied 3 years ago.

I meant from the previous tax return there is an amount B/F as overlap period profit of approx 18K, as the business ceast to exit year and this is the last tax year from the point of business, i want to know how do deal with this overlap profit B/F

May be my guess is that i dont know whether we can claim overlap period tax relief and reduce the taxable income , but i have only 6K profit current year, then i am left with sort of 12K not claimable. also can we get a refund from previous year's tax paid ?

Please clarify.


Leave this with me while I draft my answer.
Customer: replied 3 years ago.

Thanks , i will wait


Take a look at the notes starting from BIM71085 here. Overlap relief can only be claimed where either the accounting period has changed, ie you have a longer than 12 month accounting period, or the business has ceased. See BIM71090 here example of a change of accounting date and BIM71095 cessation.

If you have a loss after taking account of overlap relief in the last tax year of a business, you can claim tax relief against other income of the same year or income or profits of the previous tax year or terminal loss relief (see BIM85055) which means you can carry it back further.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Ok, good to know, that mean just to clarify 2 points;

1. B/F overlap profit from a tax return means that you have worked out this overlap period profit and paid tax on it in the past, now we are allowed to deduct against the current year's available profit ( on cessation)

2. as the amount we have is 18K and we have only profit of 6K from that business, but as you think we can set off balance 12K against the individual's other sources of taxable income year , individual he has got a large amount of income from rental properties and another partnership business, so can you deduct againt either one of those sources of income ? if so in SA100 where can we set off this 12K ? it will be good if you could let me know which section of the tax return

1 That's correct.

2 Box 33 of the short self-employment pages here or box 78 of the full self-employment pages here.
You put the overlap relief you wish to claim in box 69 of the full pages. Ignore the short pages as there is no box to claim the overlap relief.
Customer: replied 3 years ago.

Ok, so i can claim in this case 6K ( equal to this year's profit available in box 69 ) and then the balance 12K in the box 78, if i got it right from your suggestion.

You claim all the overlap relief in box 69 if the trade ceased in the tax year. That will create the loss. You then offset the loss against other income by putting it in box 78.
Customer: replied 3 years ago.

Great, that clarifies me, thanks help and good advice, thank you so much Tony.


TonyTax and other Tax Specialists are ready to help you

again. It's been a few days since I answered your question. Is there anything you need further clarification on?