Income Tax (Trading and Other Income) Act 2005 section 716

Restriction on deductions etc. relating to FOTRA securities

Section 716 prevents a person who beneficially owns a FOTRA security and is exempt from tax on it from claiming any related deductions or losses for income tax purposes.

• The restriction applies to persons who both beneficially own a FOTRA security and qualify for tax exemption on that security under the relevant chapter.
• No amounts relating to changes in the value of a FOTRA security may be brought into account for income tax purposes by such a person.
• No expenses connected with holding the security or with any transaction involving it may be deducted for income tax purposes.
• The rule ensures that a person who enjoys a tax exemption on FOTRA securities cannot also claim tax relief for any associated costs or losses.