Income Tax Act 2007 section 130

Treating loss in employment or office as CGT loss

Section 130 acts as a signpost to capital gains tax relief that may be available where a person cannot fully use employment loss relief against their general income.

• Where a loss arises from an employment or office, a claim for employment loss relief against general income may not absorb the full amount of the loss
• Any unused portion of that employment loss may be converted into an allowable loss for capital gains tax purposes
• The detailed rules for this treatment are found in sections 261B and 261C of the Taxation of Chargeable Gains Act 1992
• This provision ensures that employment losses are not simply wasted where there is insufficient general income to set them against