Income Tax Act 2007

62 Partners: losses of a tax year etc

(1) This section applies if a trade or profession is carried on by a person as a partner in a firm.

(2) Any reference to a person making a loss in a trade or profession in a tax year is to the partner making a loss in the partner’s notional trade in the basis period for the tax year (as to which, see sections 852 and 853 of ITTOIA 2005).

(3) Further—

(a) any reference to a person making a claim for relief for a loss made in a trade or profession is to the partner making a claim for relief for a loss made in the partner’s notional trade,

(b) any reference to a basis period for a tax year is to the basis period for the partner’s notional trade for the tax year,

(c) any reference to the profits or losses of a partner’s notional trade of a tax year is to the partner’s share of the firm’s profits or losses of the trade or profession treated for the purposes of Chapter 15 of Part 2 of ITTOIA 2005 as the profits or losses of the partner’s notional trade in the basis period for the tax year,

(d) any reference to a person starting to carry on a trade or profession is to the partner starting to carry on the notional trade in accordance with section 852(2) or (3) of ITTOIA 2005, and

(e) any reference to a person permanently ceasing to carry on a trade or profession is to the partner permanently ceasing to carry on the notional trade in accordance with section 852(4) to (6) of ITTOIA 2005.

(4) In this section a partner’s “notional trade” has the same meaning as in Part 9 of ITTOIA 2005.

(5) This section applies for the purposes of this Chapter and Chapter 3, except that it does not apply for the purposes of section 67(2) or sections 68 to 70 (restriction on trade loss relief against general income in case of farming or market gardening).