74ZANo relief for tax-generated losses

1

This section applies if—

a

during a tax year a person carries on (alone or in partnership) a trade, profession or vocation (“the relevant activity”),

b

the person makes a loss in the relevant activity in that tax year, and

c

the loss arises directly or indirectly in consequence of, or otherwise in connection with, relevant tax avoidance arrangements.

2

No sideways relief or capital gains relief may be given to the person for the loss (but subject to subsection (5)).

3

In subsection (1) “relevant tax avoidance arrangements” means arrangements—

a

to which the person is a party, and

b

the main purpose, or one of the main purposes, of which is the obtaining of a reduction in tax liability by means of sideways relief or capital gains relief.

4

In subsection (3) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

5

This section has no effect in relation to any loss that derives wholly from qualifying film expenditure (see section 74D).

6

For the purposes of this section—

a

capital gains relief is, in relation to a loss, the treatment of a loss as an allowable loss by virtue of section 261B of TCGA 1992 (use of trading loss as a CGT loss), and

b

capital gains relief is given for a loss when it is so treated.