Part 4 U.K.Loss relief

Chapter 3 U.K.Restrictions on trade loss relief for certain partners

[F1 Limit on amount of sideways relief and capital gains relief U.K.

Textual Amendments

F1 S. 103C and cross-heading inserted (with effect in accordance with Sch. 4 para. 1(2)-(13) of the amending Act) by Finance Act 2007 (c. 11), Sch. 4 para. 1(1)

103C Limit on reliefs in any tax year not to exceed cap for tax year U.K.

(1) This section applies if an individual carries on one or more trades—

(a) as a non-active partner in a firm during a tax year, or

(b) as a limited partner in a firm at a time in that tax year,

and the individual makes a loss in any of those trades (an “affected loss”) in that tax year.

(2) There is a restriction on the amount of sideways relief and capital gains relief which (after applying the restrictions under the other provisions of this Chapter) may be given to the individual for any affected loss (but see subsections (6) and (7)).

(3) The restriction is that the total amount of the sideways relief and capital gains relief given to the individual for all the affected losses must not exceed the cap for that tax year.

(4) The cap for any tax year is £25,000.

(5) The Treasury may by order amend the sum for the time being specified in subsection (4).

(6) The restriction under this section does not apply to so much of any affected loss as derives from qualifying film expenditure (see section 103D).

(7) The restriction under this section does not affect the giving of sideways relief for a loss made in a trade against the profits of that trade.

(8) In this section “ trade ” does not include a trade which consists of the underwriting business of a member of Lloyd's (within the meaning of section 184 of FA 1993). ]

[F2 103DMeaning of “qualifying film expenditure” U.K.

(1) For the purposes of this Chapter expenditure is qualifying film expenditure if—

(a) it is deducted under a relevant film provision for the purposes of the calculation required by section 849 of ITTOIA 2005 (calculation of firm's profits or losses), or

(b) it is incidental expenditure which (although not deducted under a relevant film provision) is incurred in connection with the production of a film, or the acquisition of the original master version of a film, in relation to which expenditure is so deducted.

(2) Expenditure is incidental if it is on management, administration or obtaining finance.

(3) The extent to which expenditure is within subsection (1)(b) is determined on a just and reasonable basis.

(4) For the purposes of this Chapter the amount of any loss that derives from qualifying film expenditure is determined on a just and reasonable basis.

(5) In this section—

• “ the acquisition of the original master version of a film ” has the same meaning as in Chapter 9 of Part 2 of ITTOIA 2005 (see sections 130 and 132 of that Act),

• “ film ” is to be read in accordance with paragraph 1 of Schedule 1 to the Films Act 1985, and

• “ a relevant film provision ” means any one of sections 137 to 140 of ITTOIA 2005 (relief for certified master versions of films). ]

Textual Amendments

F2 S. 103D inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 4 paras. 9, 21