Income Tax Act 2007 section 62

Partners: losses of a tax year etc.

Section 62 explains how the trade loss relief rules apply to partners in a firm, by treating each partner as carrying on their own separate "notional trade" for the purpose of claiming loss relief.

• When a partner makes a loss in a partnership trade or profession, the loss is treated as arising in the partner's own "notional trade" during the relevant basis period for the tax year.
• Any claim for loss relief by a partner is made in respect of the partner's notional trade, and references to profits, losses, and basis periods are all read accordingly.
• A partner starting or permanently ceasing to be a member of a firm is treated as starting or permanently ceasing the notional trade, following the rules in ITTOIA 2005.
• These rules apply for the purposes of the trade loss relief chapters, but do not apply to the special restrictions on loss relief for farming or market gardening activities.