Search Legislation

Income Tax Act 2007

 Help about what version

What Version

 Help about advanced features

Advanced Features

Changes over time for: Cross Heading: Carry-forward trade loss relief

 Help about opening options

Version Superseded: 15/09/2016

Alternative versions:

Status:

Point in time view as at 17/07/2014.

Changes to legislation:

There are currently no known outstanding effects for the Income Tax Act 2007, Cross Heading: Carry-forward trade loss relief. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

Carry-forward trade loss reliefU.K.

83Carry forward against subsequent trade profitsU.K.

(1)A person may make a claim for carry-forward trade loss relief if—

(a)the person has made a loss in a trade in a tax year, and

(b)relief for the loss has not been fully given under this Chapter or any other provision of the Income Tax Acts or under section 261B of TCGA 1992 (use of trading loss as a CGT loss).

(2)The claim is for the part of the loss for which relief has not been given under any such provision (“the unrelieved loss”) to be deducted in calculating the person's net income for subsequent tax years (see Step 2 of the calculation in section 23).

(3)But a deduction for that purpose is to be made only from profits of the trade.

(4)In calculating a person's net income for a tax year, deductions under this section from the profits of a trade are to be made before deductions of any other reliefs from those profits.

(5)This section applies to professions and vocations as it applies to trades (and section 84 is to be read accordingly).

(6)This section needs to be read with—

(a)section 84 (how relief works),

(b)section 85 (use of trade-related interest and dividends if trade profits insufficient),

(c)section 86 (trade transferred to a company),

(d)section 87 (ring fence trades),

(e)section 88 (carry forward of certain interest as loss), and

(f)sections 17(3) and 852(7) of ITTOIA 2005 (effect of becoming or ceasing to be UK resident).

84How relief worksU.K.

This section explains how the deductions are to be made. The amount of the unrelieved loss to be deducted at any step is limited in accordance with section 25(4) and (5).

Step 1

Deduct the unrelieved loss from the profits of the trade of the next tax year.

Step 2

Deduct from the profits of the trade of the following tax year the amount of the unrelieved loss not previously deducted.

Step 3

Continue to apply Step 2 in relation to the profits of the trade of subsequent tax years until all the unrelieved loss is deducted.

85Use of trade-related interest and dividends if trade profits insufficientU.K.

(1)This section applies if carry-forward trade loss relief cannot be fully given in relation to the profits of a trade of a tax year because (apart from this section) there are no profits, or insufficient profits, of the trade of the tax year.

(2)For the purposes of the relief any interest or dividends for the tax year that relate to the trade are treated as profits of the trade of the tax year.

(3)Interest or dividends for the tax year relate to the trade if they—

(a)arise in the tax year, and

(b)would be brought into account in calculating the profits of the trade but for the fact that they have been subjected to tax under other provisions of the Income Tax Acts.

86Trade transferred to a companyU.K.

(1)This section applies if—

(a)a trade is carried on by an individual otherwise than as a partner in a firm or by individuals in partnership,

(b)the trade is transferred to a company,

(c)the consideration for the transfer is wholly or mainly the allotment of shares to the individual or individuals, and

(d)in the case of any individual to whom, or to whose nominee or nominees, shares are so allotted, the individual's total income for a relevant tax year includes income derived by the individual from the company.

(2)For the purposes of carry-forward trade loss relief, the income so derived is treated as—

(a)profits of the trade of the relevant tax year carried on by the individual, or

(b)if the trade was carried on by the individual in partnership, profits of the individual's notional trade of the relevant tax year.

(3)The tax year in which the transfer is made is a relevant one if—

(a)the individual is the beneficial owner of the shares allotted as mentioned above, and

(b)the company carries on the trade,

throughout the period beginning with the date of the transfer and ending with the next 5 April.

(4)Otherwise a tax year is a relevant one if—

(a)the individual is the beneficial owner of the shares allotted as mentioned above, and

(b)the company carries on the trade,

throughout the tax year.

(5)The income derived from the company may be by way of dividends on the shares or otherwise.

(6)This section applies to businesses which are not trades as it applies to trades.

87Ring fence tradesU.K.

(1)This section applies if—

(a)a person makes a loss in a tax year carrying on oil-related activities (within the meaning of section 16 of ITTOIA 2005),

(b)those activities are treated under that section as a separate trade for the tax year or a subsequent tax year,

(c)the person makes profits in a subsequent tax year from other activities, and

(d)the other activities and the oil-related activities would, but for that section, together form a single trade.

(2)For the purposes of carry-forward trade loss relief for the loss, the person may treat profits from the other activities in a subsequent tax year as if they were profits of the separate trade (despite section 16 of ITTOIA 2005).

88Carry forward of certain interest as lossU.K.

(1)This section applies if—

(a)an individual pays interest in a tax year which is eligible for relief under section 383 (as a result of section 388 or 398),

(b)the interest is an expense incurred wholly and exclusively for the purposes of a trade carried on wholly or partly in the United Kingdom, and

(c)relief under section 383 cannot be fully given in respect of the interest because there is no income or insufficient income in the tax year.

(2)For the purposes of carry-forward trade loss relief, the amount for which relief has not been given may be carried forward to subsequent tax years as if it were a loss made in the trade.

(3)This section applies to professions and vocations as it applies to trades.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources