Illustrations - capital losses

In this lesson

1. 0:00 Trade loss relief against current year profits
2. 1:08 Calculating taxable total profits with trade losses
3. 2:55 Carrying back trade losses to prior periods
4. 3:41 Understanding the 12-month carry-back restriction
5. 5:45 Trade loss relief on company cessation
6. 6:29 Offsetting losses across multiple periods
7. 7:41 Loss memo and unrelieved loss calculation

About this lesson

The video walks through three detailed illustrations of trading loss relief. First, you'll see how to handle current year losses by offsetting them against total profits in the correct order: trade profit, property profit, and chargeable gains (with capital losses applied separately). You'll learn why it matters to deal with trade losses last and how to prepare a loss memo to track remaining losses. The second illustration shows how to carry back losses up to 12 months, with careful attention to short accounting periods that restrict how far back you can go. The third illustration demonstrates loss relief on cessation, where you can carry back losses up to 36 months but must respect the three-month profit limit in the final period before cessation. Throughout these worked examples, you'll see the practical application of key rules: how qualifying charitable donations interact with loss relief, why certain amounts get wasted, and how to structure your workings so the logic is clear. By the end, you'll be confident handling multi-period loss scenarios and avoiding common mistakes like offsetting losses beyond the permitted timeframe.

Duration: 9m