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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Trade losses - restriction of relief: non-active traders - tax-generated losses 12 March 2008 to 20 October 2009

S74B Income Tax Act 2007

No sideways loss relief may be given for a loss made by an individual carrying on a trade in a non-active capacity if the loss arises from relevant tax avoidance arrangements made in the period on or after 12 March 2008 but before 21 October 2009. The £25,000 annual limit does not apply in these circumstances.

See BIM85761 for a loss arising from relevant tax avoidance arrangements entered into on or after 21 October 2009.

Relevant tax avoidance arrangements are arrangements made for, or mainly for, the purpose of obtaining sideways loss relief.

‘Arrangements’ includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

Losses derived from qualifying film expenditure are not tax generated losses and are not affected by this exclusion from sideways loss relief, see BIM85768.

See BIM85770 where the basis period straddles 12 March 2008 and tax avoidance arrangements exist.