Income Tax Act 2007 section 133

How relief works

Section 133 explains the mechanics of how share loss relief deductions are applied against an individual's income, including the order and priority of those deductions across tax years.

• A qualifying share loss must first be deducted from the individual's net income for the specified tax year (the loss year or the preceding year), with any unrelieved balance carried to the other year only if a claim covers both years
• The amount that can be deducted at each step is capped by the general limits in sections 24A and 25(4) and (5), meaning relief cannot exceed the individual's available income for the relevant year
• Share loss relief takes priority over trade loss relief claimed under section 64 (sideways loss relief) or section 72 (early trade losses relief), and where two share loss claims fall in the same year, the earlier loss year's claim is dealt with first
• Any part of the allowable loss that is not absorbed by share loss relief against income remains available as a capital loss for offset against capital gains under the Taxation of Chargeable Gains Act 1992