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Dear Sir,
As you explained in the lecture that if “Other trading losses” increase the non-savings income then the remainder will move to saving income column. And if it increase the saving income then remainder will move to dividend income column. What if it increases dividend income as well? where it will go then?Moreover, would the same treatment of moving columns be applied to other deductions like “qualifying interest” and “Personal allowance”?
Trading losses do NOT increase income they REDUCE income and the order in which that income is reduced is firstly non savings income followed by savings income and finally dividend income.
If any loss remains unused then you need to look at what other loss reliefs are available and losses are dealt with in detail in chapter 7.
The pro forma income tax computation shown on page 5 in chapter 2 is simply identifying where on that computation loss reliefs will be deducted – the rules about the application of those losses are as just mentioned above, to be dealt with later in chapter 7.
Note ** at the bottom of the page states that the other deductions are also made in that order
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