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When we have relieved $31000 loss and lost P.A why your answer indicated that as P.A is lost but the repayment of $21000 ( $31000 – $10000 ) will get generated???
Before any loss relief is applied in 2013/14 the taxpayer has a Total Income of 31,000 and a Taxable Income of 21,000.
The loss relief claim, if made, must be made against the Total Income and no partial claims may be made.
Hence the taxpayer must claim relief of 31,000 to avoid being taxed on just 21,000 of Taxable Income that would otherwise have been taxed at the basic rate of 20%!
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