Chapter:	112	Title:	Inland Revenue Ordinance	Gazette Number:	E.R. 1 of 2012
Section:	12A	Heading:	Treatment of losses	Version Date:	09/02/2012

(1) Where in any year of assessment the aggregate of the outgoings, expenses and allowances deductible under section 12(1)(a) and (b) from the assessable income of a person exceeds the amount of his assessable income, the amount of the excess shall, subject to subsection (4), be carried forward and set off against his assessable income in subsequent years of assessment.
(2) The aggregate amount set off against a person's assessable income in subsequent years of assessment shall not exceed the amount of any excess under subsection (1).
(3) Subject to subsection (4), a set off by a person under this section shall first be made against his assessable income for the year of assessment next succeeding the year of assessment in respect of which the excess occurred and, so far as it cannot be so made, against his assessable income for the next year of assessment and so on until the excess has been completely set off.
(4) Where in any year of assessment the net chargeable incomes of the husband and wife are aggregated by reason of an election made under section 10(2), any excess carried forward into that year under this section shall-

(a) be set off primarily against the assessable income of the spouse whose deductions resulted in the excess and then, so far as it cannot be so set off, against the assessable income of the other spouse; and
(b) then, and so far as it cannot be set off in accordance with paragraph (a)-
(i) where no election is made under section 10(2) in respect of the following year of assessment, in accordance with subsection (3); or
(ii) where an election is made under section 10(2) in respect of the following year of assessment, in accordance with paragraph (a),
and so on from year to year until the excess has been completely set off. (Replaced 43 of 1989 s. 5)