Income tax relief for losses incurred in a trade or profession – TDM updated

Sep 28, 2020

Revenue updated the Tax and Duty Manual (TDM), which contains guidance on the legislative provisions that provide for income tax relief for losses incurred in a trade or profession. The TDM also provides an overview of the provisions that restrict loss relief in certain circumstances.

Revenue eBrief No. 176/20 confirmed the TDM Part 12-01-02 - Income tax relief for losses incurred in a trade or profession – has been updated as follows:

  • to include reference to the temporary income relief for self-employed individuals, which was introduced in the Financial Provisions (Covid-19) (No.2) Act 2020. (paragraph 2.4)
  • to confirm that where losses relief is given under section 381, the amount by which the loss reduces a particular class or source of income will be regarded as a specific deduction made from that class or source of income in computing the individua’s total income for the year. (paragraph 4.0)
  • to include guidance on the application of section 403(3), which provides that the set-off of surplus capital allowances against other income is generally not available in the case of leasing capital allowances. (paragraph 5.4.1)