Part 13Additional relief for expenditure on research and development

Chapter 2Relief for SMEs: cost of R&D incurred by SME

Reliefs: further provision

1048Treatment of deemed trading loss under section 1045

1

This section applies if under section 1045 a company is treated as making a trading loss in an accounting period.

2

The trading loss may not be F1deducted from profits of a preceding accounting period under F2section 37(3)(b) or 42 of CTA 2010 unless the company is entitled to relief under section 1045 for the earlier period.

3

Subsection (4) applies if—

a

the company begins, in the accounting period or a later period, to carry on a trade, and

b

the trade is derived from the research and development in relation to which the relief mentioned in subsection (1) was obtained.

4

In that case, so far as—

a

the company has not obtained relief in respect of the trading loss under any other provision, and

b

the loss has not been surrendered under F3Part 5 of CTA 2010 (group relief),

the trading loss is to be treated as if it were a loss of that trade brought forward under F4section 45 of CTA 2010 (relief of trading losses against future trading profits).

5

Subsection (4) is subject to section 1062 (restriction on losses carried forward where tax credit claimed).