UT (Tax & Chancery) UT-2024-000113 - [2025] UKUT 00165 (TCC)

Before turning to Derry SC concerning the application of Schedule 1B TMA to claims for share loss relief under ITA, we explain how the appellate courts have considered trade loss relief. This relief was available under s.380 ICTA (and considered in De Silva to which we return in the discussion section) and then under the successor provision, s.64 ITA.

In Knibbs v HMRC [2019] EWCA Civ 1719 (“Knibbs”), the Court of Appeal explained the process by which claims to carry-back trade loss relief for post 2007 claims under s.64 ITA are governed by Schedule 1B TMA. It concluded that paragraph 2(3), Schedule 1B TMA applied to post 2007 claims for trade loss relief to treat them as relating to the later year. According to David Richards LJ at [45]-[47]:

Paragraph 2 of Schedule 1B is headed “Loss relief” and materially provides as follows:

“2(1) This paragraph applies where a person makes a claim requiring relief for a loss incurred or treated as incurred, or a payment made, in one year of assessment (‘the later year’) to be given in an earlier year of assessment (‘the earlier year’).