Corporate Capital Loss Restriction (CCLR)

Corporate Capital Loss Restriction (CCLR)

A new restriction on the use of carry forward capital losses by companies within the charge to UK corporation tax came into effect on 1 April this year. Based on the measures introduced in 2017 that apply to corporation tax revenue losses, the restriction (CCLR) generally looks to limit the use of carry forward capital losses by a company to no more than 50% of its chargeable gains – but the position is a little more complicated than this suggests, particularly when it comes to non-resident companies that make direct or indirect disposals of UK land.

Draft legislation was originally published for consultation by HMRC in July 2019. General elections and other things meant that the final form of the clauses in Finance Bill 2020 only appeared this March (after the Budget). As part of its Finance Bill 2020 notes, LexisPSL interviewed Sarah Squires about the new capital loss restriction, asking not only about how it worked but also about the changes made to the rules since publication last July of the first draft of the new legislation.

A copy of the interview with Sarah Squires can be found here.

This interview was first published on Lexis®PSL Tax in May 2020 and is reproduced with the kind permission of the publishers.  All rights reserved.

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