Income Tax Act 2007 section 101

Treating excess post-cessation trade relief as CGT loss

Section 101 explains what happens when a person cannot fully use their post-cessation trade relief claim against income, by allowing the unused portion to be treated as an allowable capital gains tax loss.

• Where a claim for post-cessation trade relief exceeds available income, the excess amount need not be wasted
• The unused portion of the relief can be treated as an allowable loss for capital gains tax purposes
• This provides a secondary route for obtaining tax benefit from post-cessation expenses that cannot be relieved against income
• The detailed rules for this treatment are set out in sections 261D and 261E of the Taxation of Chargeable Gains Act 1992