Where a trader, etc. sustains a loss in a tax year, he may claim relief from income tax against his general income in:

the same tax year (ITA 2007, s. 64(2)(a));

the preceding tax year (ITA 2007, s. 64(2)(b)); or

both years (ITA 2007, s. 64(2)(c)).

Relief may not be given more than once for a loss or the same part of a loss.

A person with income tax losses may not have any other income against which to set those losses (or may have insufficient income to absorb the full amount of the losses). Such a person may be able to treat the unused part as an allowable loss for capital gains tax purposes (ITA 2007, s. 71; TCGA 1992, s. 261B and 261C).

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