Loss Relief for a Sole Trader

Question 1

Loss Relief for a Sole Trader

Loss Relief Claims are Available for Trades That:

Answer 1

• Are Carried on for Commercial Purposes; and
• Have a View to the Realisation of Profits.

Question 2

Loss Relief for a Sole Trader

What is Shown in the Tax Computation of a Loss-Making Period?

Answer 2

£Nil.

Question 3

Loss Relief for a Sole Trader

What are Losses Set Against Under Section 64?

Answer 3

Net Income of the Current and/or Preceding Tax Year.

No Partial Claims are Permitted; An Individual’s Personal Allowance Could be Wasted.

Question 4

Loss Relief for a Sole Trader

When Must a Section 64 Claim be Made?

Answer 4

The First Anniversary of 31 January Following a Tax Year a Loss Arose.

31 January 2027 for 2024/25

Question 5

Loss Relief for a Sole Trader

What Sort of Income are Certain Loss Relief Claims Restricted Against?

Answer 5

Non-Trading Income.

Question 6

Loss Relief for a Sole Trader

What is an Early Trade Loss Relief Claim?

Answer 6

Losses Arising in the First 4 Tax Years of Trading Can be Set Against Net Income of the Preceding 3 Tax Years.

On a ‘First in, First Out’ Basis.