Part 4 U.K.Loss relief

Chapter 2 U.K.Trade losses

Restriction on relief for uncommercial trades U.K.

66 Restriction on relief unless trade is commercial U.K.

(1) Trade loss relief against general income for a loss made in a trade in a tax year is not available unless the trade is commercial.

(2) The trade is commercial if it is carried on throughout F1 ... the tax year—

(a) on a commercial basis, and

(b) with a view to the realisation of profits of the trade.

(3) If at any time a trade is carried on so as to afford a reasonable expectation of profit, it is treated as carried on at that time with a view to the realisation of profits.

(4) If the trade forms part of a larger undertaking, references to profits of the trade are to be read as references to profits of the undertaking as a whole.

(5) If there is a change in the [F2 tax year] in the way in which the trade is carried on, the trade is treated as carried on throughout the [F2 tax year] in the way in which it is carried on by the end of the [F2 tax year].

(6) The restriction imposed by this section does not apply to a loss made in the exercise of functions conferred by or under an Act.

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

Textual Amendments

F1 Words in s. 66(2) omitted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2022 (c. 3), Sch. 1 paras. 42(2), 61(1)

F2 Words in s. 66(5) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2022 (c. 3), Sch. 1 paras. 42(3), 61(1)

Modifications etc. (not altering text)

C1 Ss. 66-70 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(a)

C2 Ss. 66-70 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(a)