BIM75420 - Trade losses: types of relief: relief against chargeable gains

TCGA92/S261B extends relief for losses made by a person (individual, partner or trustee) in carrying on a trade, profession or vocation or employment (in relation to employment see EIM31655 and BIM75240) to include a set-off against chargeable gains. The relief applies to losses for the tax year 1991-92 and subsequent years.

A person who makes a loss and claims relief under ITA07/S64, but who does not have enough income to offset that loss in full, can have the excess treated as a capital loss to the extent that there are chargeable gains for the year against which the loss is to be relieved.

For the purposes of this legislation, chargeable gains are the CG less losses (including capital losses for the same year and capital losses brought forward) without distinguishing between business and non-business assets, but disregarding taper relief (this applied to certain disposals in the period 6 April 1998 - 5 April 2008) and the CG annual exempt amount (TCGA92/S261C(2)). The relief operates either upon a separate claim under TCGA92/S261B from the ITA07/S64 claim, or the ITA07/S64 claim must make it clear that it is also made under TCGA92/S261B.

Where the loss is claimed under ITA07/S64(2)(b), see BIM75205 for how relief is given.