Part 4Loss relief
Chapter 3Restrictions on trade loss relief for certain partners
Introduction
103BF1 Meaning of “non-active partner” etc
1
For the purposes of this Chapter an individual carries on a trade as a non-active partner during a tax year if the individual—
a
carries on the trade as a partner in a firm at a time during the year,
b
does not carry on the trade as a limited partner at any time during the year, and
c
does not devote a significant amount of time to the trade in the relevant period for the year.
2
For the purposes of this Chapter an individual devotes a significant amount of time to a trade in the relevant period for a tax year if, in that period, the individual spends an average of at least 10 hours a week personally engaged in activities carried on for the purposes of the trade.
3
For this purpose “ the relevant period ” means the basis period for the tax year (unless the basis period is shorter than 6 months).
4
If the basis period for the tax year is shorter than 6 months, “ the relevant period ” means—
a
the period of 6 months beginning with the date on which the individual first started to carry on the trade (if the basis period begins with that date), or
b
the period of 6 months ending with the date on which the individual permanently ceased to carry on the trade (if the basis period ends with that date).
5
If—
a
any relief is given on the assumption that the individual devoted or will devote a significant amount of time to the trade in the relevant period for a tax year, but
b
the individual in fact failed or fails to do so,
the relief is withdrawn by the making of an assessment to income tax under this section.