Page 57 - F6 Slide - Taxation - Lecture Day 2 Class
P. 57
Ring Fencing
• Losses are ring fenced if:
• If in out of the 5 preceding years the taxpayer made losses in
3 years.
• There are from suspect trades.
• What is a suspect trade?
• Ring fencing applies to taxpayers within the higher tax
bracket.
• Ring fencing effectively means that the losses from other
trades are not deducted from other trades and as a result
they can only be deducted from that specific trade.
• Escape clause ( facts and circumstances ).
• The “six-out-of-ten-years” requirement (the “catch all”
provision)
• Ring fencing on apply to a taxpayer who is a natural person.
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