Part 4Loss relief
Chapter 3Restrictions on trade loss relief for certain partners
F1Partnerships with mixed membership etc
116AExcess loss allocation to partners who are individuals
1
Subsection (2) applies if—
a
in a tax year, an individual (“A”) makes a loss in a trade as a partner in a firm, and
b
A's loss arises, wholly or partly—
i
directly or indirectly in consequence of, or
ii
otherwise in connection with,
relevant tax avoidance arrangements.
2
No relevant loss relief may be given to A for A's loss.
3
In subsection (1)(b) “relevant tax avoidance arrangements” means arrangements—
a
to which A is party, and
b
the main purpose, or one of the main purposes, of which is to secure that losses of a trade are allocated, or otherwise arise, in whole or in part to A, rather than a person who is not an individual, with a view to A obtaining relevant loss relief.
4
In subsection (3)(b) references to A include references to A and other individuals.
5
For the purposes of subsection (3)(b) it does not matter if the person who is not an individual is not a partner in the firm or is unknown or does not exist.
6
In this section—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
“relevant loss relief” means—
- a
sideways relief,
- b
relief under section 83 (carry-forward trade loss relief),
- c
relief under section 89 (terminal trade loss relief), or
- d
capital gains relief.
- a
7
This section applies to professions as it applies to trades.
S. 116A and cross-heading inserted (with effect in accordance with Sch. 17 para. 14 of the amending Act) by Finance Act 2014 (c. 26), Sch. 17 para. 8(2)