BIM75620 - Farming losses: restriction of relief after 5 years of losses

ICTA88/S397 denies relief against general income etc (see BIM75605) in respect of a farming or market gardening loss where a loss computed without regard to capital allowances was incurred in each of the five years of assessment preceding that in which the claimed loss was incurred (see BIM75625).

This provision was introduced in 1967 to complement what is now ICTA88/S384 Section 397 provides a more objective test and should be applied, subject to BIM75640 and BIM75645, in all cases where the conditions are satisfied.

The Section only applies to losses sustained in trades of farming or market gardening, but for this purpose the definitions of those trades (see BIM55051 and BIM62601) are extended, by subsection (5), to include activities carried on outside the UK.