Under S89 ITA 2007, a person (individual, partner or trustee) who makes a terminal loss in a trade (including a profession or vocation) which is permanently discontinued may claim relief for the loss as follows:
•against profits of the same trade for the year of cessation, and
•by reference to profits of the same trade for the three tax years prior to that in which the discontinuance occurs.
The relief is to be given as far as possible against profits for a later rather than an earlier year.
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