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 F1... 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 F2tax year 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.