Income Tax Act 2007 section 795

Meaning of "post-1 December 2004 loss"

Section 795 defines what counts as a "post-1 December 2004 loss" for the purposes of the anti-avoidance rules on partners claiming excessive sideways or capital gains relief for trading losses.

• A trading loss qualifies as a "post-1 December 2004 loss" if the basis period for the relevant tax year begins on or after 2 December 2004
• Where a basis period straddles 2 December 2004, only the portion of the loss attributable to the period from 2 December 2004 to the end of that basis period is treated as a post-1 December 2004 loss
• The straddling-period portion is calculated by reference to the individual's share of the partnership's losses during that part of the basis period, as if it were a standalone period for computing the firm's profits or losses
• The individual's share of those losses is determined according to their interest in the partnership during the relevant part of the period