B8.201 Overview of reliefs available for trade losses
For the latest New Development, see ND.1900.
An individual who sustains a loss in a trade, profession or vocation carried on by him (alone or in partnership) may claim relief by offsetting the loss against other income. For an established trade the loss can be offset against current year income, carried back for offset against income of the previous year or carried forward. The carry back relief is extended to cover a three year period if the losses are incurred in the first four years of a trade or the years of cessation. In addition, as announced at Budget the period over which trading losses can be carried back is to be temporarily extended from 12 months to three years for tax years tax years 2020/21 and 2021/22 for unincorporated businesses, see ND.1900.
Note that a partnership may not itself claim relief for a trading loss — the loss is apportioned to the individual partners according to the profit sharing arrangements in force for the period in which the loss is incurred and relief claimed accordingly by the individual partners, see B7.520.
In this Division, references to a trading loss include references to a loss in a profession or vocation. It does not include any losses incurred in any employment or office — such losses are relieved separately under