Income Tax Act 2007

113Unrelieved losses brought forwardU.K.
This section has no associated Explanatory Notes

(1)This section applies for the purpose of determining an individual's entitlement to sideways relief and capital gains relief in relation to a trade if—

(a)at a time during a tax year (“the current tax year”) the individual carries on the trade as a partner in a firm or makes a contribution to the assets of a firm within subsection (2) on the firm's winding up, and

(b)as a result of section 110, sideways relief or capital gains relief has not been given to the individual for amounts of loss made in the trade in previous tax years.

(2)A firm is within this subsection if the individual has carried on the trade as a partner in the firm.

(3)So far as they are not excluded by subsection (4), the amounts of loss mentioned in subsection (1)(b) are treated as having been made in the current tax year.

(4)An amount of loss is excluded so far as—

(a)as a result of this section, sideways relief or capital gains relief has been given to the individual for the amount for years prior to the current tax year or would have been so given had a claim been made, or

(b)other than as a result of this section, relief under the Income Tax Acts has been given to the individual for the amount for years prior to the current tax year or for the current tax year.

(5)For the purpose of applying sections 107 and 110 in relation to the amounts of loss treated by this section as having been made in the current tax year—

(a)the individual is treated as having carried on the trade during the current tax year as a non-active partner in the firm, and

(b)the current tax year is treated as if it were an early tax year in relation to the individual's carrying on of the trade.

(6)Subsection (7) applies if the individual—

(a)made a contribution in the current tax year to the assets of the firm on its winding up, but

(b)did not carry on the trade as a partner in the firm in the current tax year.

(7)If this subsection applies—

(a)the restrictions under sections 66 and 74(1) do not apply in relation to the amounts of loss treated by this section as having been made in the current tax year, and

(b)in the application of this Chapter in relation to those amounts of loss, section 110(4) has effect as if the words “the basis period for” were omitted.

(8)In subsection (1)(b) the reference to amounts of loss does not include amounts of loss which have been treated by section 109 as having been made in any previous tax year.