In certain circumstances 'sideways' loss relief is denied or restricted. Sideways loss relief is defined as loss relief against general income (B8.202) or loss relief in the early years of a trade (B8.206)1.
The restrictions operate to either essentially 'ring-fence' losses arising from certain activities or to prevent use of artificially contrived losses.
Losses arising from certain activities
Sideways loss relief is restricted for losses arising from the following activities:
- Ìý
•ÌýÌýÌýÌý leasing of plant and machinery, see B5.4172
- Ìý
•ÌýÌýÌýÌý oil extraction activities, see D7.9023
- Ìý
•ÌýÌýÌýÌý exploitation of films, see B5.5054
- Ìý
•ÌýÌýÌýÌý farming, market gardening and forestry, see B5.1755
Artificially contrived losses
Targeted anti-avoidance provisions also apply to restrict sideways loss relief, where the losses have been 'artificially contrived'. These provisions address non-active traders, (building on the existing restriction for non-active partners), and 'tax-generated losses'.
Non-active traders
The amount of losses for which sideways loss relief can be claimed against other general income and capital gains6
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Web page updated on 24 Aug 2024 12:25