Section 116A — Finance Act 2014: Excess loss allocation to partners who are individuals

Excess loss allocation to partners who are individuals 116A 1 Subsection (2) applies if—

a in a tax year, an individual (“A”) makes a loss in a trade as a partner in a firm, and b A's loss arises, wholly or partly—

i directly or indirectly in consequence of, or ii otherwise in connection with, relevant tax avoidance arrangements.

2 No relevant loss relief may be given to A for A's loss.

3 In subsection (1)(b) “ relevant tax avoidance arrangements ” means arrangements—

a to which A is party, and b the main purpose, or one of the main purposes, of which is to secure that losses of a trade are allocated, or otherwise arise, in whole or in part to A, rather than a person who is not an individual, with a view to A obtaining relevant loss relief.

4 In subsection (3)(b) references to A include references to A and other individuals.

5 For the purposes of subsection (3)(b) it does not matter if the person who is not an individual is not a partner in the firm or is unknown or does not exist.

6 In this section— “ arrangements ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and “ relevant loss relief ” means— sideways relief, relief under section 83 (carry-forward trade loss relief), relief under section 89 (terminal trade loss relief), or capital gains relief.

7 This section applies to professions as it applies to trades.