Income Tax Act 2007

152 Losses from miscellaneous transactions

(1) A person may make a claim for loss relief against miscellaneous income if in a tax year (“the loss-making year”) the person makes a loss in any relevant transaction.

(2) A transaction is a relevant one if, assuming there were profits or other income arising from it—

(a) those profits or that other income would be section 1016 income, and

(b) the person would be liable for income tax charged on those profits or that other income.

(3) The claim is for the loss to be deducted in calculating the person’s net income for the loss-making year and subsequent tax years (see Step 2 of the calculation in section 23).

(4) But a deduction for that purpose is to be made only from the person’s miscellaneous income.

(5) A person’s miscellaneous income is so much of the person’s total income as is—

(a) income or gains arising from transactions, and

(b) section 1016 income.

This is subject to subsection (6).

(6) If the loss was made by the person as a partner in a partnership, the transactions covered by subsection (5)(a) are limited to transactions entered into by the partnership.

(7) In calculating a person’s net income for a tax year, deductions under this section from the person’s miscellaneous income are to be made before deductions of any other reliefs from that miscellaneous income.

(8) In this section “section 1016 income” means income on which income tax is charged under or by virtue of any provision to which section 1016 applies.

(9) This section needs to be read with—

(a) section 153 (how relief works),

(b) section 154 (transactions in deposit rights), and

(c) section 155 (claims).