Part 4

Loss relief
Chapter 2

Trade losses

Trade loss relief against general income

Deduction of losses from general income
64
1
A person may make a claim for trade loss relief against general income if the person—
a
carries on a trade in a tax year, and
b
makes a loss in the trade in the tax year (“the loss-making year”).
2
The claim is for the loss to be deducted in calculating the person's net income—
a
for the loss-making year,
b
for the previous tax year, or
c
for both tax years.
(See Step 2 of the calculation in section 23.)
3
If the claim is made in relation to both tax years, the claim must specify the tax year for which a deduction is to be made first.
4
Otherwise the claim must specify either the loss-making year or the previous tax year.
5
The claim must be made on or before the first anniversary of the normal self-assessment filing date for the loss-making year.
6
Nothing in this section prevents a person who makes a claim specifying a particular tax year in respect of a loss from making a further claim specifying the other tax year in respect of the unused part of the loss.
7
This section applies to professions and vocations as it applies to trades.
8
This section needs to be read with—
a
section 65 (how relief works),
b
sections 66 to 70 (restrictions on the relief),
c
sections 75 to 79 (restrictions on the relief and early trade losses relief in relation to capital allowances),
d
section 80 (restrictions on those reliefs in relation to ring fence income),
e
section 81 (restrictions on those reliefs in relation to dealings in commodity futures), and
f
section 734 of ICTA (restrictions on those reliefs in relation to bond-washing).