Farming losses: restriction of relief after 5 years of losses
S67 Income Tax Act 2007
The five year rule only applies to trading losses arising from farming or market gardening activities. The rule denies trade loss relief against general income etc (see BIM85605) where a loss computed without regard to capital allowances was incurred in each of the five tax years preceding that in which the claimed loss was incurred (see BIM85625).
While only farming in the UK is deemed to be a trade, the five year rule is not restricted to UK based activities.