Taxes Consolidation Act 1997 section 388

Meaning of "permanently discontinued" for purposes of terminal loss

Section 388 defines when a trade or profession is treated as "permanently discontinued" for the purposes of terminal loss relief under sections 385 to 389.

• A trade is permanently discontinued when treated as such under section 69, or when a partner's several trade is deemed discontinued under section 1008(1)(a)(ii).
• A person who continues to carry on the trade after a deemed discontinuance cannot claim terminal loss relief in respect of that discontinuance.
• A person who ceases to carry on the trade may claim terminal loss relief against profits assessed on the same trade before a previous discontinuance, provided they were continuously engaged between the two discontinuances.
• Where the previous discontinuance occurred within 12 months of the later one, the previous discontinuance is disregarded when calculating the terminal loss under section 386(2).