G Duckett v HMRC

Personal Tax: Trade loss relief

In G Duckett v HMRC (TC00370 – 23 February) a pensioner (D) carried on a small picture-framing business which consistently made losses. He appealed against an amendment to a self-assessment contending that he should be allowed to carry forward these losses against non-trading income for subsequent years. The First-Tier Tribunal rejected this contention and dismissed his appeal holding that trading losses could only be set against non-trading income for the same year under ITA 2007 s 64 or carried forward against subsequent trading profits under ITA 2007 s 83. There was 'no provision to carry forward unrelieved losses to set against general income in future years'. (An appeal against a surcharge imposed under TMA 1970 s 59C was also dismissed.)

Why it matters: The Tribunal has upheld HMRC's interpretation of ITA 2007 ss 64 (deduction of losses from general...