Trading loss relief for individuals (UK)
A qualifying individual may have alternative claims for a trading loss, including relief against general income of the loss year or preceding year and carry-forward relief against later profits of the same trade, subject to statutory conditions, limits and claim deadlines. Different rules apply in early or terminal years and to companies. Choosing relief requires considering the taxpayer’s circumstances and the law for the assessment period.
Worked example
A sole trader incurs a trading loss and checks whether a general-income claim is available or whether the unused loss can be carried forward against future profits of the same trade. The decision considers the relevant conditions and deadlines.
Common mistake
Assuming every loss can be deducted from any income in any year, or applying company loss rules to a sole trader automatically.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |