As explained at ¶262-750, tax relief is available if a person has ceased permanently to carry on a trade and then, within seven years from the date of that cessation, a ‘qualifying event’ occurs in relation to a debt that is owed to that person (ITA 2007, s. 98). Where such an event occurs, relief is given by deducting the appropriate amount of the debt in calculating the person's net income for the relevant tax year (i.e. at Step 2 of the calculation at ITA 2007, s. 23) (ITA 2007, s. 97(3)).

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