Losses from trading are calculated on the same basis as profits1.
A taxpayer who sustains trading losses may claim relief from tax by making a deduction in calculating net income under the rules in the Income Tax Act 20072. As the trading loss may be set against other income, this is referred to as 'sideways' relief3. Losses from trading can be carried back one year and claimed as a deduction of income of that year4. Sideways relief for a loss made in a trade in a tax year is not available unless the trade is carried on throughout the basis
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