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What is an income tax loss?

An income tax loss is a loss that can be set against income for income tax purposes. Not all losses can be set against income: some are capital losses that must be sent against capital gains and some are not allowable losses for tax purposes. Income tax losses are discussed below. Capital losses are discussed in the Use of capital losses guidance note.

Income tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.

Summary of guidance notes ― relief for income tax losses