Taxes Management Act 1970 Schedule 1B paragraph 2

Loss relief

Schedule 1B paragraph 2 sets out the rules for claiming tax relief where a loss or payment arises in one tax year but the taxpayer wishes to carry it back to an earlier tax year.

• The claim must relate to the later year in which the loss was incurred, not the earlier year to which relief is carried back
• The amount claimed is the difference between the tax actually chargeable for the earlier year and the tax that would have been chargeable had the loss relief been applied to that earlier year
• Relief is given effect in the later year through repayment, set-off against tax due, or an increase in the aggregate amount due under the self-assessment payment provisions
• Allowable capital gains tax losses deducted on death under TCGA 1992 against gains of the preceding three years are treated as if they were loss relief claims under this paragraph