Income Tax Act 2007 (c. 3)

Part 4 U.K. Loss relief

Chapter 2 U.K. Trade losses

[F1 General restrictions on sideways relief and capital gains relief U.K.

Textual Amendments

F1 Ss. 74A-74D and cross-heading inserted (21.7.2008 with effect in accordance with Sch. 21 paras. 6, 7 of the amending Act) by Finance Act 2008 (c. 9), Sch. 21 para. 2

74B No relief for tax-generated losses U.K.

(1) This section applies if—

(a) during a tax year an individual carries on a trade, otherwise than as a partner in a firm, in a non-active capacity (see section 74C),

(b) the individual makes a loss in the trade in that tax year, and

(c) the loss arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements.

(2) No sideways relief or capital gains relief may be given to the individual for the loss (but subject to subsection (5)).

(3) In subsection (1) “relevant tax avoidance arrangements” means arrangements made by the individual the main purpose, or one of the main purposes, of which is the obtaining of a reduction in tax liability by means of sideways relief or capital gains relief.

(4) In subsection (3) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

(5) This section has no effect in relation to any loss that derives wholly from qualifying film expenditure (see section 74D).

(6) Subsection (10) of section 74A (capital gains relief) applies for the purposes of this section.]

Modifications etc. (not altering text)

C1 Ss. 74B-74D applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(b)