Taxes Consolidation Act 1997 section 383

Relief under Case IV for losses

Section 383 provides relief for losses arising from transactions whose profits would have been taxable under Case IV of Schedule D (miscellaneous income), allowing those losses to be set against other Case IV income of the same year or carried forward against Case IV income of future years.

• A loss on a transaction that would have given rise to a Case IV charge may be set off against other Case IV income of the same tax year, with any unrelieved balance carried forward against Case IV income of future years.
• Relief operates exclusively within the Case IV charge — losses may only be set against Case IV income; they cannot be set against income from other sources or schedules.
• Where the loss arises in a partnership, each partner claims relief only for his or her individual share of the loss, not the whole partnership loss; if a partner leaves the firm, the remaining partners cannot absorb that partner's unrelieved losses.
• Carried-forward losses must be set off as early as possible — first against the Case IV assessment of the immediately following year, then the year after that, and so on until the loss is fully absorbed.