Part 4Loss relief
Chapter 2Trade losses
Early trade losses relief
74Restrictions on relief unless trade is commercial etc
(1)
Early trade losses relief for a loss made by an individual 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 the basis period for the tax year—
(a)
on a commercial basis, and
(b)
in such a way that profits of the trade could reasonably be expected to be made in the basis period or within a reasonable time afterwards.
(3)
If the trade forms part of a larger undertaking, the reference to profits of the trade is to be read as a reference to profits of the undertaking as a whole.
(4)
Early trade losses relief for a loss made by an individual is not available if—
(a)
the individual first carries on the trade at a time when the individual has a spouse or civil partner and is living with the spouse or civil partner,
(b)
the spouse or civil partner previously carried on the trade, and
(c)
the loss is made in a tax year falling after the relevant 4 year period.
(5)
The relevant 4 year period comprises—
(a)
the tax year in which the spouse or civil partner first carried on the trade, and
(b)
the next 3 tax years.
(6)
This section applies to professions and vocations as it applies to trades.