# Income Tax Act 2007, Section 73: How relief works

Extent: E+W+S+N.I.

This section explains how the deductions are made for the 3 tax years mentioned in section 72(2). The amount of the loss to be deducted at any step is limited in accordance with sections 24A and 25(4) and (5) .
Step 1
Deduct the loss in calculating the individual's net income for the earliest of the 3 tax years.
Step 2
Deduct any part of the loss not deducted at Step 1 in calculating the individual's net income for the next tax year.
Step 3
Deduct any part of the loss not deducted at Step 1 or 2 in calculating the individual's net income for the latest of the 3 tax years.
Other claims
If the loss has not been deducted in full at Steps 1 to 3, the individual may use the part not so deducted in giving effect to any other relief under this Chapter (depending on the terms of the relief).

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Source: https://www.legislation.gov.uk/ukpga/2007/3/section/73 (the official version)
Page: https://openlegislation.uk/income-tax-act-2007/section-73
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.