Page 43 - F6 Slide - Taxation - Lecture Day 2

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.

43