Income Tax Act 2007 section 154

Transactions in deposit rights

Section 154 explains how loss relief against miscellaneous income applies when a person makes a loss on a transaction involving deposit rights, and their income includes interest on the deposit.

• Where a person disposes of or exercises a right to receive an amount and makes a loss, and that transaction qualifies as a transaction in a deposit, special rules apply for loss relief purposes.
• A transaction counts as a deposit transaction if any profit or gain from it would have been taxable under the rules in Chapter 11 of Part 4 of ITTOIA 2005.
• If the person's total income for the tax year includes interest payable on the deposit amount, that interest is treated as relevant miscellaneous income for the purposes of claiming loss relief.
• This re-characterisation of the interest as relevant miscellaneous income allows the loss from the deposit rights transaction to be set against that interest income.