BIM75701 - Trading losses: restriction of relief for losses
There is no relief under ICTA88/S380 unless a trade, profession
or vocation is carried on on a commercial basis and with the view
to the realisation of profits, (ICTA88/S384 (1)).
Before applying the test in ICTA88/S384 the first matter to
be considered is whether the activities that are being carried on
actually amount to trading. If the activities are not trading then
the losses are not available for relief. See
BIM20050 onwards in relation to what
constitutes trading activities.
If the activities do indeed constitute a trade it is then
necessary to apply the test in ICTA88/S384, see
BIM75705.
As regards the restriction of loss relief claimed under
ICTA88/S381 (losses in early year of trade) see
BIM75715.
