BIM75701 - Losses - restriction of relief: Trade losses - restriction of relief for losses
There is no relief under ITA07/S64 unless the trade, profession or vocation is commercial, that is, unless it is carried on throughout the basis period for the tax year -
- on a commercial basis and
- with the view to the realisation of profits of the trade, (ITA07/S66(2)).
Before applying the test in ITA07/S66(2) the first matter to be considered is whether the activities that are being carried on actually amount to trading. If the activities do not amount to trading then the losses are not trade losses and are not available for relief. See BIM20050 onwards in relation to what constitutes trading activities.
If the activities constitute a trade it is then necessary to apply the test in ITA07/S66, see BIM75705.
As regards the restriction of loss relief claimed under ITA07/S72 (losses in early year of trade) see BIM75735.
