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Losses Carried Forward

  • 08-08-2018 10:37am
    #1
    Oakleigh
    Registered Users Posts: 9 ✭


    Apologies in advance if this is a stupid question but appreciate if anyone could provide a little guidance.

    Can a non-trading company continue to carry forward losses?

    Background: Company previously trading but ceased a number of years ago. Company was not dissolved and continues to file returns as a non-trading company.Not sure if the company will ever trade again but it is unlikely. There may be future litigation in favour of company.

    Note: professional advice being sought separately but hoped for a steer here in the interim.

    Thanks in advance


Comments

  • #2
    ACCA1916
    Registered Users, Registered Users 2 Posts: 52 ✭✭ACCA1916


    The company you describe is a trading company but has not had sales for some time. It has filed losses for the past number of years? If the company is still in existence and has filed Company accounts and Corporation tax losses (even minimal), the losses from this company can be offset against future profits of this company provided it is the result of profits of the same trade. Again that's only a take on the basis of your information with a lot of assumptions. The company did not cease? but the trade did? Is the potential profit big? what is the extent of the losses? profit is at 12.5%.


  • #3
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,492 ✭✭✭✭Marcusm


    If the trade has ceased absolutely then even if it commenced an identical trade they could not be utilised. In order for them to be carried forward the trade must be carried on continuously if even at a much reduced scale or scope. The circumstances which you have described are not consistent with that, IMO.


  • #4
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Marcusm wrote: »
    If the trade has ceased absolutely then even if it commenced an identical trade they could not be utilised. In order for them to be carried forward the trade must be carried on continuously if even at a much reduced scale or scope. The circumstances which you have described are not consistent with that, IMO.

    Perhaps but in reality it would be very difficult for the revenue to prove that it was not in the intention of the company to recommence the trade if things picked up or that there was no activity going on during the period when there were no sales which linked to two trades together. Keeping in touch with contacts, continual research of the market. etc. It should be very easy to argue that the trade did not cease, there was simply a pause in trading,

    All of course depending on the actual circumstances of the case.

    dbran


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