Income Tax Act 2007 section 807

Supplementary provision relating to calculation in section 806

Section 807 provides supplementary rules for determining how losses and profits are attributed to a licence when carrying out the calculation under section 806, which determines the amount of income treated as received by an individual in the context of avoidance involving trading losses.

• A loss relating to a licence is the portion of the overall trading loss that derives from expenditure incurred in exploiting that licence, determined on a just and reasonable basis
• A "claimed loss" is one for which the individual has claimed either sideways relief or capital gains relief
• Profits relating to a licence are the portion of the individual's trading profits that derive from income arising under an agreement related to or containing the licence
• Both the loss attribution and the profit attribution must be calculated on a just and reasonable basis