Joe Brough explains how traders can use the enhanced carry back and carry forward rules to relieve losses against other income and gains.
When starting a business, it is not uncommon for a loss to be made in the early years of trading, particularly for capital-intensive businesses.
Loss reliefs
For unincorporated traders, tax relief for trading losses is most commonly relieved by one of the following reliefs:
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against total income of the current or prior year (ITA 2007, s 64);
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against profits of the same trade in future years (ITA 2007, s 83); or
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against chargeable gains when an ITA 2007, s 64 claim has been made (ITA 2007, s 71).
For trades in their opening or closing years, additional loss relief options are available. These
