Commentary on Sections Overview Overview Section 65: How relief works
253.This section specifies how deductions for the loss are to be made. It is based on section 380(1) and (2) of ICTA.
254.Subsection (1) makes explicit what is only implicit in section 380(1) of ICTA, that:
	the whole amount of the loss must be deducted in calculating the claimant’s net income for the specified tax year;
	if a claim is made in respect of two tax years, then only so much, if any, of the amount of the loss which it has not been possible to deduct from the claimant’s income for the specified year can be deducted in calculating the claimant’s net income for the other year.
255.This section does not deal with the parts of section 380(1)(a) and (b) of ICTA that limit the amount of the deduction for any tax year to the whole of the claimant’s income for the year, where the income is less than the amount of the loss. That limit is in section 25(4) and (5). Section 25 contains rules about how the reliefs listed in section 24, which include trade loss relief, are to be deducted at Step 2 of section 23 in order to calculate the claimant’s net income.
256.Subsections (2) and (3) provide that if claims are made in respect of trade losses incurred in successive tax years and both claims specify that relief is to be given against income of the same tax year, then the claim in respect of the loss in the earlier year takes priority.
257.Subsection (4) makes it explicit that this rule also operates in relation to the interaction between claims for trade loss relief and claims for employment loss relief.