This section explains how the deductions are made for the 3 tax years mentioned in section 72(2). The amount of the loss to be deducted at any step is limited in accordance with F1sections 24A and 25(4) and (5) .

Step 1

Deduct the loss in calculating the individual's net income for the earliest of the 3 tax years.

Step 2

Deduct any part of the loss not deducted at Step 1 in calculating the individual's net income for the next tax year.

Step 3

Deduct any part of the loss not deducted at Step 1 or 2 in calculating the individual's net income for the latest of the 3 tax years.

Other claims

If the loss has not been deducted in full at Steps 1 to 3, the individual may use the part not so deducted in giving effect to any other relief under this Chapter (depending on the terms of the relief).