The term Brought Forward describes how a Limited Company or Sole Trader can be tax efficient by bringing losses forward from the previous accounting period.
Brought Forward refers to the process in which a Limited Company or Sole Trader brings the balance from the previous accounting period to the current one. It is similar to the term Carry Forward but from the perspective of this year rather than the previous one.
This process allows for more tax-efficiency as you can bring a loss forward from the previous year to the reduce the amount of tax you need to pay on your profit for this year. Trading losses and Capital Losses are examples of losses that can be brought forward.
For example, an individual could make a £10,000 loss selling shares in the previous tax year. If they make a £50,000 profit selling shares in the current tax year, the loss can be brought forward and only £40,000 will be eligible for tax.
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