Losses

A trading or professional loss can be offset against income from all sources (s 381). An unused trading or professional loss is automatically carried forward against such income for the next and later tax years (s 382).

A trading or professional loss can be increased by current capital allowances (s 392).

A loss in the final year of trade (a terminal loss) may be offset against the income of the three immediately preceding tax years (s 385389).

A Case IV loss may be set against Case IV income and any unused balance may be carried forward against Case IV income of later tax years (s 384).

A  Case V (rental) loss may be set against Case V income and any unused balance may be carried forward for offset against rental income of the next and later tax years (s 385).

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