PART X LOSS RELIEF AND GROUP RELIEF
C7C8C9CHAPTER I LOSS RELIEF: INCOME TAX
Pt. 10 Chs. 1, 2 extended (with effect in accordance with s. 64, Sch. 22 paras. 16-18 of the extending Act) by Finance Act 2002 (c. 23), Sch. 22 para. 4(2)(d)
Pt. 10 Ch. 1 modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), ss. 226, 227, 232(3) (with Sch. 2)
Trade etc. losses
381 Further relief for individuals for losses in early years of trade.
C1C2C5C61
M1Where an individual carrying on a trade sustains a loss in the trade in—
a
the year of assessment in which it is first carried on by him; or
C3b
any of the next three years of assessment;
he may, by notice given F3on or before the first anniversary of the 31st January next following the year of assessment in which the loss is sustained, make a claim for relief under this section.
2
M2Subject to section 492 and this section, relief shall be given under subsection (1) above from income tax on F1so much of the claimant’s income as is equal to the amount of the loss or, where it is less than that amount, the whole of that income, being income for the three years of assessment last preceding that in which the loss is sustained, taking income for an earlier year before income for a later year.
3
M3Relief shall not be given for the same loss or the same portion of a loss both under subsection (1) above and under any other provision of the Income Tax Acts.
4
M4Relief shall not be given under subsection (1) above in respect of a loss sustained in any period unless F4. . . the trade was carried on throughout that period on a commercial basis and in such a way that profits in the trade (or, where the carrying on of the trade forms part of a larger undertaking, in the undertaking as a whole) could reasonably be expected to be realised in that period or within a reasonable time thereafter.
5
Relief shall not be given under subsection (1) above in respect of a loss sustained by an individual in a trade if—
a
at the time when it is first carried on by him he is married to and living with another individual who has previously carried on the trade; and
b
the loss is sustained in a year of assessment later than the third year of assessment after that in which the trade was first carried on by the other individual.
6
F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C47
M5This section applies, with the necessary modifications, in relation to a profession or vocation as it applies in relation to a trade.
Pt. 10 Chs. 1, 2 extended (with effect in accordance with s. 44 of the extending Act) by Finance Act 1998 (c. 36), Sch. 6 para. 2 (with Sch. 6 para. 6)