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HMRC internal manual

Savings and Investment Manual

Artificial transactions in futures and options: losses (this guidance applies to disposals of futures and options before 6 April 2013)

Losses are relievable against profits from miscellaneous transactions

ITTOIA05/S567 gives rules on losses, when they arise and how they are relievable.

Firstly, losses are only relievable where ITA07/S152 applies. This gives loss relief for miscellaneous transactions, where profits on those transactions would be taxable. The loss is only relievable against profits from other miscellaneous income. (This is essentially the same as the relief for losses under Case VI of Schedule D formerly at ICTA88/S392.) Miscellaneous income is listed in ITA07/S1016 and includes income chargeable under ITTOIA05/PT4/CH12. The loss is taken to arise when the disposal is made.

No double counting

Secondly, there is a link to TCGA92/S148A to S148C, which is relevant for the application of the rules in ITTOIA05/S564 (SAIM7110). These three sections were inserted into TCGA as a consequence of the rewriting of ICTA88/SCH5AA (the predecessor legislation to ITTOIA05/PT4/CH12). As described in SAIM7110, they prevent gains and losses which have been taxed or relieved under Chapter 12 from being taxed or relieved again under the capital gains rules.