Countryfield Village Homes v HMRC

Cathya Djanogly

In Countryfield Village Homes v HMRC [2016] UKFTT 468 (5 July 2016) the FTT found that loss relief should be applied in chronological order with the effect that some losses remained unrelieved.

Countryfield had made profits in the 2005 and 2006 accounting periods and losses in the 2007 2008 and 2009 periods. It was agreed that the loss for the 2007 period had been properly carried back to be set off against the 2006 period leaving £48 445 profit for the 2006 period unrelieved.

The issue was the priority in which losses for corporation tax purposes can be set off against the profits of earlier accounting periods under ICTA 1988 s 393A and more specifically the meaning of the phrase ‘subject to…any relief for an earlier loss’ in s 393A(1). HMRC contended that relief was to be given for losses in chronological order so that a...

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