Income Tax Act 2007

Restriction on sideways relief for specific trades

80 Ring fence income

(1) This section applies if—

(a) a person has income arising from oil extraction activities or oil rights (“ring fence income”), and

(b) the person makes a loss in any trade.

(2) Sideways relief for the loss is not to be given against the person’s ring fence income except so far as the loss arises from oil extraction activities or oil rights.

(3) “Oil extraction activities” and “oil rights” have the same meaning as in Chapter 5 of Part 12 of ICTA (see section 502 of that Act).

81 Dealings in commodity futures

(1) This section applies if—

(a) a person makes a loss in a trade of dealing in commodity futures,

(b) the person carried on the trade as a partner in a firm,

(c) the person or one or more of the other partners in the firm was a company, and

(d) arrangements within subsection (3) have been made.

(2) Sideways relief is not available for the loss.

(3) Arrangements are within this subsection if as a result of them—

(a) the sole benefit, or

(b) the main benefit,

that might be expected to arise to the person from the person’s interest in the firm is the obtaining of a reduction in tax liability by means of sideways relief.

(4) It does not matter whether the arrangements were made in the partnership agreement or in any other way.

(5) References to making arrangements include effecting schemes.

(6) If relief is given in a case to which this section applies, the relief is withdrawn by the making of an assessment to income tax under this section.

(7) “Commodity futures” means commodity futures that are for the time being dealt in on a recognised futures exchange (within the meaning of ITTOIA 2005, see section 558(3) of that Act).

82 Exploitation of films

In the case of a trade carried on by an individual which consists of or includes the exploitation of films—

(a) see sections 115 and 116 for a restriction on sideways relief if the trade was carried on by the individual as a partner in a firm, and

(b) see section 796 for a charge to income tax if the individual made a loss in the trade (whether carried on alone or as a partner in a firm) for which sideways relief is claimed.