Assessed losses incurred by natural persons from trades could be ring‑fenced, and might not be available for set-off against other income.

These restrictions apply to an individual whose taxable income is at the maximum marginal rate of tax, before setting off any assessed loss or balance of assessed loss.

For the restrictions to apply the person must have incurred an assessed loss from the secondary trade in at least three out of the last five years, or have carried on any of the following trades:

• any sport practised by that person or any relative
• any dealing in collectibles by that person or any relative
• the rental of residential accommodation, unless at least 80% of the residential accommodation is used by persons who are not relatives of that person for at least half of the year of assessment
• the rental of vehicles, aircraft or boats as defined in the Eighth Schedule, unless at least 80% of the vehicles, aircraft or boats are used by persons who are not relatives of that person for at least half of the year of assessment
• animal showing by that person or any relative
• farming or animal breeding, unless that person carries on farming, animal breeding or activities of a similar nature on a full-time basis
• any form of performing or creative arts practised by that person or any relative, or
• any form of gambling or betting practised by that person or any relative
• the acquisition or disposal of cryptocurrency

These provisions do not apply in respect of an assessed loss incurred by a person during any year of assessment from carrying on any trade as contemplated above, where that trade constitutes a business in respect of which there is a reasonable prospect of deriving taxable income (other than taxable capital gain) within a reasonable period. Where these losses have been incurred for at least six years out of the preceding ten years then such concession will not apply except for farming.