Overview
411.This Chapter provides relief for losses in an employment or office.
Section 128: Employment loss relief against general income
412.This section provides relief for a person’s losses in an employment or office. It is based on section 380(1) of ICTA.
413.The reference to “office” is new, but reflects the long-standing HMRC practice of allowing the holder of an office to set off losses against general income. See Change 18 in Annex 1.
414.Section 384A of ICTA restricts relief under section 380 of ICTA in relation to avoidance schemes entered into by individuals carrying on a leasing trade, or another qualifying activity, and involving first-year allowances. See section 76.
415.As section 380 of ICTA provides relief for losses in an employment (as well as in a trade) the restriction in section 384A of ICTA is, in principle, applicable to an employment loss.
416.In view of the remote possibility of section 384A of ICTA ever applying to employment losses, this section is not subject to a restriction equivalent to that in section 76. See Change 19 in Annex 1.
Section 129: How relief works
417.This section explains how deductions are made. It is based on section 380(1) and (2) of ICTA.
418.Subsections (2) and (3) provide that, if claims are made in respect of employment losses incurred in successive tax years and both claims specify that the relief is to be given against income of the same tax year, the claim in respect of the loss in the earlier year takes priority.
419.Subsection (4) makes it explicit that this rule also operates in relation to the interaction between claims for employment losses and those for trade losses.
Section 130: Treating loss in employment or office as CGT loss
420.This section is a signpost to a capital gains tax relief that may be available where there is insufficient income to absorb an amount claimed by way of employment loss relief. It is new.
