A person may claim relief from income tax under this section for a loss the person has made on disposing of deeply discounted securities.

For this purpose a person makes such a loss only if A exceeds B, where—

• A is the amount the person paid for the securities, excluding any incidental expenses incurred in connection with the acquisition, and

• B is the amount payable on the disposal, excluding any incidental expenses incurred in connection with the disposal.

For the calculation of the amount of the loss, see section 455(2) to (4) (under which those expenses are taken into account).

If a claim under this section is made by a person other than a trustee, the relief is given by deducting the loss in calculating the person's net income for the tax year in which the disposal occurs (see Step 2 of the calculation in section 23 of ITA 2007).

If such a claim is made by a trustee, the amount of profits arising in the tax year in which the disposal occurs that is charged under this Chapter is reduced by the amount of the loss.

A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the disposal occurs.

This section is subject to section 458(2) (securities held by non-UK resident trustees).