From 6 April 2013, the total amount of certain Income Tax reliefs that can be used to reduce your total taxable income is limited to £50,000, or 25% of your adjusted total income, if higher.
The main reliefs subject to this limit are:
- trade loss relief against general income and early trade losses relief – claimed on the self-employment, Lloyd’s underwriters or partnership pages
- property loss relief (relating to capital allowances or agricultural expenses) – claimed on the UK property or foreign pages
- post-cessation trade relief, post-cessation property relief, employment loss relief, former employee’s deduction for liabilities, losses on deeply discounted securities and strips of government securities – claimed on the additional information pages
- share loss relief, unless claimed on Enterprise Investment Scheme (EIS) or Seed Enterprise Investment
- Scheme (SEIS) shares – claimed on the capital gains summary pages
- qualifying loan interest – claimed on the additional information pages
These restrictions do not apply to Gift Aid relief; nor pension contributions which have their own limits.
It is worth considering these restrictions as they may limit your ability to recover a proportion of cash lost by claiming a reduction in tax payable on future or past income and/or gains.