Part 4

Loss relief
Chapter 2

Trade losses

Trade loss relief against general income

How relief works
65
1
This subsection explains how the deductions are to be made.
The amount of the loss to be deducted at any step is limited in accordance with section 25(4) and (5).
- Step 1 Deduct the loss in calculating the person’s net income for the specified tax year.
- Step 2 This step applies only if the claim is made in relation to both tax years. Deduct the part of the loss not deducted at Step 1 in calculating the person’s net income for the other tax year. Other claims If the loss has not been deducted in full at Steps 1 and 2, the person may use the part not so deducted in giving effect to any other relief under this Chapter (depending on the terms of the relief).
2
There is a priority rule if a person—
a
makes a claim for trade loss relief against general income (“the first claim”) in relation to the loss-making year, and
b
makes a separate claim in respect of a loss made in the following tax year in relation to the same tax year as the first claim.
3
The rule is that priority is given to making deductions under the first claim.
4
For this purpose a “separate claim” means—
a
a claim for trade loss relief against general income, or
b
a claim for employment loss relief against general income under section 128.