Income Tax Act 2007 section 790

Overview of Chapter

Section 790 provides an overview of the anti-avoidance rules in Chapter 5 that impose income tax charges on individuals who claim excessive trading loss relief, particularly in the context of partnerships, film-related trades, and licence-related trades.

• The chapter targets three categories of individuals: partners claiming excess sideways or capital gains relief (section 792), individuals claiming relief for film-related trading losses (section 797), and partners claiming relief for licence-related trading losses (section 805)
• The charges apply when an individual makes a trading loss and claims either sideways relief (offsetting the loss against general income) or capital gains relief (treating the trading loss as an allowable capital gains tax loss)
• Sideways relief means either trade loss relief against general income (sections 64 to 70) or early trade losses relief available in the first four years of a trade (sections 72 to 74)
• Capital gains relief means treating a trading loss as an allowable loss for capital gains tax purposes under section 261B of the Taxation of Chargeable Gains Act 1992