Section 261B: Treating trade loss etc as CGT loss, Taxation of Chargeable Gains Act 1992

A person may make a claim under this section if—

relief is available to the person under section 64 or 128 of ITA 2007 (trade or employment loss relief against general income) for a tax year in relation to an amount of loss, and

the person makes a claim under that section for the amount to be deducted in calculating the person's net income for the tax year.

A person may also make a claim under this section if—

relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount of loss, but

the person's total income for the tax year is nil or does not include any income from which the amount can be deducted.

A claim under this section is for determining so much of the amount of the loss ("the relevant amount") as—

is not deducted in calculating the person's net income for the tax year, and

has not already been taken into account for the purposes of any relief for any other tax year or any year of assessment (whether under ITA 2007, this section or otherwise).

When the relevant amount can no longer be varied—

by the tribunal on appeal, or

on the order of a court,

it is treated for the purposes of capital gains tax as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.

But so much of the relevant amount as exceeds the maximum amount (see section 261C) is not to be treated for the purposes of capital gains tax as an allowable loss.

The excess may, however, be used in giving effect to any other loss relief under Part 4 of ITA 2007 (depending on the terms of the relief).

The amount treated as an allowable loss under this section—

is no longer to be regarded as an amount available for income tax relief, and

is not to be deductible from chargeable gains accruing to a person in any year of assessment that begins after the person has permanently ceased to carry on the trade, profession, vocation, employment or office in which the loss was made.

A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the loss was made in the trade, profession, vocation, employment or office.

In this section "normal self-assessment filing date", "tax year" and "total income" have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).

Section 261B: Treating trade loss etc as CGT loss

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