Income Tax Act 2007 section 126

Treating excess post-cessation property relief as CGT loss

Section 126 explains what happens when a person cannot fully use their post-cessation property relief claim against income, by allowing the unused portion to be treated as a capital gains tax loss.

• Where a claim for post-cessation property relief exceeds available income, the excess need not be wasted
• The unused portion of the relief can be converted into an allowable loss for capital gains tax purposes
• This provides a safety net ensuring that relief is not lost simply because there is insufficient income to absorb it
• The detailed rules for this treatment are found in sections 261D and 261E of the Taxation of Chargeable Gains Act 1992