Income Tax Act 2007 (c. 3)

Part 13 U.K. Tax avoidance

Chapter 5 U.K. Avoidance involving trading losses

Individuals in partnership: recovery of excess relief U.K.

793 Calculating the amount of income treated as received U.K.

(1) The amount of income treated as received by the individual under section 792 when the chargeable event occurs is the lowest of amounts A to C.

(2) Amount A is the amount by which the individual's contribution to the firm is reduced as a result of the application of regulations made under section 114.

(3) Amount B is the amount given by—

(a) taking, at the time immediately after the chargeable event occurs, the total amount of trade losses claimed that are post-1 December 2004 losses, and

(b) reducing that amount (but not below nil) by any reclaimed relief.

(4) Amount C is the amount given by—

(a) taking the amount by which, at the time immediately after the chargeable event occurs, the total amount of trade losses claimed exceeds the individual's contribution to the firm, and

(b) reducing that amount (but not below nil) by any reclaimed relief.