Finance Act 2014

8 (1) Chapter 3 of Part 4 of ITA 2007 (trade loss relief: restrictions for certain partners) is amended as follows. U.K.

(2) In section 102 (overview of Chapter) after subsection (2) insert—

“(2A) This Chapter also provides for no relief to be given for a loss made by an individual in a trade carried on by the individual as a partner in a firm in certain cases where some or all of the loss is allocated to the individual rather than a person who is not an individual (see section 116A).”

(3) At the end insert—

“Partnerships with mixed membership etc U.K.

116A Excess loss allocation to partners who are individuals

(1) Subsection (2) applies if—

(a) in a tax year, an individual (“A”) makes a loss in a trade as a partner in a firm, and

(b) A's loss arises, wholly or partly—

(i) directly or indirectly in consequence of, or

(ii) otherwise in connection with,

relevant tax avoidance arrangements.

(2) No relevant loss relief may be given to A for A's loss.

(3) In subsection (1)(b) “relevant tax avoidance arrangements” means arrangements—

(a) to which A is party, and

(b) the main purpose, or one of the main purposes, of which is to secure that losses of a trade are allocated, or otherwise arise, in whole or in part to A, rather than a person who is not an individual, with a view to A obtaining relevant loss relief.

(4) In subsection (3)(b) references to A include references to A and other individuals.

(5) For the purposes of subsection (3)(b) it does not matter if the person who is not an individual is not a partner in the firm or is unknown or does not exist.

(6) In this section—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and

• “relevant loss relief” means—

  (a)

  sideways relief,

  (b)

  relief under section 83 (carry-forward trade loss relief),

  (c)

  relief under section 89 (terminal trade loss relief), or

  (d)

  capital gains relief.

(7) This section applies to professions as it applies to trades.”