Sideways loss relief

The loss restrictions apply to corporate and non-corporate limited partners and members of LLPs and also to individual non-active partners. The provisions restrict what is known as sideways loss relief namely:

1. •

   for individual partners ― loss relief that could otherwise be claimed against net income and gains in the current year and the preceding year

2. •

   for individual non-active partners ― early year loss relief, and

3. •

   for corporate partners ― relief against total available profits of the same accounting period, preceding accounting period or later accounting period and group relief

ITA 2007, ss 103–114; CTA 2010, ss 55–61

The restrictions broadly limit loss relief to the capital contributed by the partner, further details on how this is calculated are set out below.

Once the restriction based on capital contribution has been determined, there are also two other limits that must be remembered for