Income Tax Act 2007 section 793

Calculating the amount of income treated as received

Section 793 sets out how to calculate the amount of income that a partner is treated as having received when a chargeable event occurs, where the partner has previously claimed excessive sideways or capital gains relief for trade losses.

• When a chargeable event occurs, the income treated as received is the lowest of three amounts: A, B, or C.
• Amount A is the reduction in the individual's contribution to the firm caused by regulations made under section 114.
• Amount B is the total of post-1 December 2004 trade losses claimed, measured immediately after the chargeable event, reduced (but not below nil) by any relief already reclaimed.
• Amount C is the excess of total trade losses claimed over the individual's contribution to the firm, measured immediately after the chargeable event, reduced (but not below nil) by any relief already reclaimed.