SCHEDULES

SCHEDULE 1Abolition of basis periods

PART 6Transitional provision: continuing trades etc

71Treatment of losses arising from deduction for overlap profit

1

This paragraph applies if, by virtue of a deduction for overlap profit allowed and made under this Part of this Schedule (see paragraphs 68 and 69(2) and Step 3 of the calculation in paragraph 70(2))—

a

the trader makes a loss for the tax year 2023-24 where the trader would (but for the deduction) have made a profit, or

b

the trader makes a loss for the tax year 2023-24 that is greater than it would have been had the deduction not been made.

2

Sections 89 to 91 of ITA 2007 (terminal trade loss relief) apply in relation to the trader as if—

a

the trader had permanently ceased to carry on the trade on 5 April 2024, and

b

the amount of the loss mentioned in sub-paragraph (1)(a), or the amount by which the loss mentioned in sub-paragraph (1)(b) is increased as a result of the deduction being made, were a terminal loss made in the trade in the final tax year.

3

Nothing in this paragraph is to be taken to affect the further application of sections 89 to 91 of ITA 2007 in relation to the trade.