Income Tax Act 2007 section 794

Meaning of "the total amount of trade losses claimed" etc.

Section 794 defines the key terms used in the anti-avoidance rules for partners who claim excessive sideways or capital gains relief for trading losses, including the total amount of trade losses claimed, reclaimed relief, and the individual's contribution to the firm.

• The total amount of trade losses claimed is the aggregate of losses for which an individual has claimed sideways relief or capital gains relief, covering losses made as a limited partner, LLP member, or non-active partner in early tax years
• Reclaimed relief is the total income previously treated as received under section 792 when the anti-avoidance rule was applied to earlier loss relief claims in the same trade
• The individual's contribution to the firm is calculated for the purposes of whichever restriction provision (for limited partners, LLP members, or non-active partners) applied; where more than one applied, the provision used for the most recent loss takes precedence
• Where an individual is involved in a firm carrying on multiple trades, the calculations are performed separately for each trade and then added together, though non-active partner losses are excluded for trades of the type described in section 110(8)