BIM72611 - Computing the amount to assess: Partnerships - loss relief restrictions: Calculation of limit of relief - £25,000 annual limit from 2 March 2007
For losses sustained on or after 2 March 2007 there is an annual limit of £25,000 on the amount of losses for which sideways loss relief can be claimed by affected partners. The annual limit is applied after other restrictions (see BIM72610) have been calculated.
The annual limit does not apply to trading losses derived:
- from relevant film-related losses, see BIM72614; or
- from carrying on a Lloyds underwriting business.
Partners affected
The £25,000 annual limit applies to losses made by:
- limited partners
- non-active general partners (for all years of trading, not just early years)
- non-active LLP members (for all years of trading, not just early years).
Basis periods straddling 2 March 2007
Where the partner’s basis period to which the losses relate straddles 2 March 2007 (which may be the case for tax year 2006/07 and/or 2007/08) the £25,000 annual limit does not apply to “pre-announcement losses” for that period.
Guidance on calculating “pre-announcement losses” for basis periods straddling 2 March 2007 is at BIM72612.
