Loss relief is restricted where, in a given tax year (‘the relevant tax year’), an individual makes a loss in a trade (‘the relevant trade’) that he is carrying on as a non-active member of a firm (ITA 2007, s. 110). The restriction applies to ‘sideways relief’ (against the individual's other income) and to ‘capital gains relief’; see ¶263-250 for definitions of both of these terms.

There is no restriction on the right to carry the loss forward and set it against future profits from the same trade.

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