|
| |
|
(b) | the individual’s share of the losses is to be determined |
| |
according to his interest in the partnership during that period. |
| |
(4) | In subsection (3) the references to “the partnership” are to the |
| |
partnership as a member of which the individual carries on the relevant |
| |
| 5 |
(5) | In relation to years of assessment which are before the year 2005-06, this |
| |
section has effect as if— |
| |
(a) | in subsection (2) for the definition of “basis period” there were |
| |
| |
““basis period” means the basis period given by sections 60 |
| 10 |
to 63 as applied by section 111(4) and (5), except that the |
| |
basis period for a year of assessment to which section |
| |
61(1) applies is to be taken to be the period beginning |
| |
with the date when the individual first carried on the |
| |
trade and ending with the end of the year of |
| 15 |
| |
(b) | the reference in subsection (3)(a) to section 849 of ITTOIA 2005 |
| |
were a reference to section 111(2) of this Act.” |
| |
(2) | In section 117 of ICTA (restriction on relief for limited partners) at the end |
| |
| 20 |
“(5) | This section is subject to provision made by regulations under section |
| |
118ZN (partners: meaning of “contribution to the trade”).” |
| |
(3) | In section 118ZC of ICTA (meaning of the contribution to the trade of a member |
| |
of a limited liability partnership) at the end add— |
| |
“(5) | This section is subject to provision made by regulations under section |
| 25 |
118ZN (partners: meaning of “contribution to the trade”).” |
| |
(4) | In section 118ZG of ICTA (meaning of a non-active partner’s contribution to |
| |
the trade) at the end add— |
| |
“(7) | This section is subject to provision made by regulations under section |
| |
118ZN (partners: meaning of “contribution to the trade”).” |
| 30 |
(5) | The amendments made by this section are deemed to have come into force on |
| |
| |
Partners: recovery of excess relief |
| |
74 | Recovery of excess relief given under section 380 or 381 of ICTA |
| |
(1) | This section applies where— |
| 35 |
(a) | an individual makes one or more claims for relief under section 380 or |
| |
381 of ICTA at any time in respect of any relevant losses sustained by |
| |
him in a trade (“the relevant trade”), |
| |
(b) | the whole or part of that relief has been claimed against income other |
| |
than income consisting of profits arising from the relevant trade, |
| 40 |
(c) | the amount of the relief which could be given against such income was |
| |
determined in accordance with one or more of the restriction |
| |
provisions (whether or not any of those provisions prevented any |
| |
amount of relief being given), and |
| |
|
| |
|
| |
|
(d) | at any time after the claim or claims mentioned in paragraph (a) has or |
| |
have been made, a chargeable event occurs in relation to the individual. |
| |
(2) | The “restriction provisions” are— |
| |
(a) | section 117 of ICTA (restriction on relief for limited partners), |
| |
(b) | that section as applied by section 118ZB of ICTA in relation to a |
| 5 |
member of a limited liability partnership, and |
| |
(c) | section 118ZE of ICTA (restriction on relief for non-active partners). |
| |
(3) | A “chargeable event” occurs in relation to an individual at any time when a |
| |
relevant decrease in the individual’s contribution to the relevant trade occurs |
| |
which immediately results in— |
| 10 |
(a) | the total losses claimed (less any reclaimed relief) becoming greater |
| |
than the individual’s contribution to the relevant trade, or |
| |
(b) | an increase in the amount (if any) by which the total losses claimed (less |
| |
any reclaimed relief) exceeds the individual’s contribution to the |
| |
| 15 |
(4) | Where a chargeable event occurs in relation to an individual— |
| |
(a) | the individual is to be treated as receiving at the time of the occurrence |
| |
of the chargeable event an amount of income equal to the chargeable |
| |
| |
(b) | that income is not to be treated as profits of the relevant trade and is to |
| 20 |
be chargeable to income tax for the year of assessment in which the |
| |
chargeable event occurs, and |
| |
(c) | the individual is to be liable for any tax so chargeable. |
| |
(5) | The “total losses claimed” means the total amount of any losses sustained by |
| |
the individual in the relevant trade in any eligible year of assessment to the |
| 25 |
extent that they are losses— |
| |
(a) | in respect of which the individual has at any time claimed relief under |
| |
section 380 or 381 of ICTA, or |
| |
(b) | that he has at any time claimed as allowable losses under section 72 of |
| |
| 30 |
(6) | “Reclaimed relief” means the total of the amounts which the individual has |
| |
been treated as receiving under subsection (4) as a result of the occurrence of |
| |
any previous chargeable event in relation to the individual in respect of the |
| |
| |
(7) | The “individual’s contribution to the relevant trade” at any time means the |
| 35 |
amount of the individual’s contribution to that trade at that time within the |
| |
meaning given for the purposes of the relevant restriction provision and |
| |
computed at that time in accordance with that provision. |
| |
(8) | The “relevant restriction provision” means— |
| |
(a) | the restriction provision which applied as mentioned in subsection |
| 40 |
| |
(b) | where more than one restriction provision so applied, the restriction |
| |
provision which so applied to the amount of relief which could be |
| |
given in respect of the relevant loss which was most recently sustained |
| |
by the individual in the relevant trade. |
| 45 |
(9) | A “relevant decrease in the individual’s contribution to the relevant trade” |
| |
occurs when the amount of that contribution becomes, as a result of the |
| |
application of any regulations made under section 118ZN of ICTA (partners: |
| |
|
| |
|
| |
|
meaning of “contribution to the trade”), less than the amount it would |
| |
otherwise be apart from the application of those regulations. |
| |
(10) | The “amount of the relevant decrease in the individual’s contribution to the |
| |
relevant trade” is the difference between those two amounts. |
| |
(11) | An “eligible year of assessment” is— |
| 5 |
(a) | a year of assessment at any time during which the individual carried on |
| |
the relevant trade as a member of a limited liability partnership or as a |
| |
limited partner within the meaning given by section 117(2) of ICTA, or |
| |
(b) | a qualifying year of assessment within the meaning of section 118ZE of |
| |
| 10 |
(12) | In sections 75 to 77 references to expressions which are defined in this section |
| |
are to be construed in accordance with this section. |
| |
(13) | This section is deemed to have come into force on 2nd December 2004. |
| |
75 | Computing the chargeable amount |
| |
(1) | For the purposes of section 74, the “chargeable amount” is determined by |
| 15 |
taking whichever is the smallest of amounts A, B and C. |
| |
(2) | Amount A is the amount of the relevant decrease in the individual’s |
| |
contribution to the relevant trade which constitutes the chargeable event. |
| |
(3) | Amount B is the amount given by— |
| |
(a) | taking, at the time immediately after the occurrence of the chargeable |
| 20 |
event, the amount of the total losses claimed which are relevant losses, |
| |
| |
(b) | reducing that amount (but not below nil) by any reclaimed relief at that |
| |
| |
(4) | Amount C is the amount given by— |
| 25 |
(a) | taking the amount by which, at the time immediately after the |
| |
occurrence of the chargeable event, the total losses claimed exceed the |
| |
individual’s contribution to the relevant trade, and |
| |
(b) | reducing that amount (but not below nil) by any reclaimed relief at that |
| |
| 30 |
(5) | This section is deemed to have come into force on 2nd December 2004. |
| |
76 | Meaning of “relevant loss” |
| |
(1) | For the purposes of sections 74 and 75 a “relevant loss” means— |
| |
(a) | a loss sustained by the individual in the relevant trade in a year of |
| |
assessment the basis period for which begins on or after 2nd December |
| 35 |
| |
(b) | a post-announcement loss sustained by the individual in the relevant |
| |
trade in a straddling year of assessment. |
| |
(2) | For the purposes of this section— |
| |
“basis period” means the basis period given by Chapter 15 of Part 2 of |
| 40 |
ITTOIA 2005, as applied by section 853 of that Act, except that the basis |
| |
period for a year of assessment to which section 199(1) of that Act |
| |
applies is to be taken to be the period beginning with the date when the |
| |
|
| |
|
| |
|
individual first carried on the relevant trade and ending with the end |
| |
of the year of assessment; |
| |
“post-announcement loss”, in relation to a straddling year of assessment, |
| |
means the loss (if any) sustained by the individual in the relevant trade |
| |
| 5 |
(a) | begins with 2nd December 2004, and |
| |
(b) | ends with the end of the basis period for that straddling year of |
| |
| |
“straddling year of assessment” means a year of assessment the basis |
| |
period for which begins before and includes 2nd December 2004. |
| 10 |
(3) | In the definition of “post-announcement loss” in subsection (2), the reference to |
| |
the loss sustained by the individual in the relevant trade in a period is a |
| |
reference to his share of any losses of the partnership arising for that period |
| |
| |
(a) | the losses of the partnership arising for that period from the trade are |
| 15 |
to be computed in the same way as if the period were one for which |
| |
profits and losses had to be computed for the purposes of section 849 of |
| |
| |
(b) | the individual’s share of the losses is to be determined according to his |
| |
interest in the partnership during that period. |
| 20 |
(4) | In subsection (3) the references to “the partnership” are to the partnership as a |
| |
member of which the individual carries on the relevant trade. |
| |
(5) | This section is deemed to have come into force on 2nd December 2004. |
| |
77 | Transitional provision for years of assessment before the year 2005-06 |
| |
(1) | This section applies in relation to years of assessment which are before the year |
| 25 |
| |
(2) | Subsection (4) of section 74 has effect as if for “individual—” to the end there |
| |
were substituted “individual, the individual is to be treated as receiving at the |
| |
time of the occurrence of the chargeable event annual profits or gains which are |
| |
of an amount equal to the chargeable amount and are chargeable to income tax |
| 30 |
under Case VI of Schedule D.”. |
| |
(3) | Section 76 has effect as if— |
| |
(a) | in subsection (2) for the definition of “basis period” there were |
| |
| |
““basis period” means the basis period given by sections 60 |
| 35 |
to 63 of ICTA as applied by section 111(4) and (5) of that |
| |
Act, except that the basis period for a year of assessment |
| |
to which section 61(1) of that Act applies is to be taken |
| |
to be the period beginning with the date when the |
| |
individual first carried on the relevant trade and ending |
| 40 |
with the end of the year of assessment;”, and |
| |
(b) | the reference in subsection (3)(a) to section 849 of ITTOIA 2005 were a |
| |
reference to section 111(2) of ICTA. |
| |
(4) | This section is deemed to have come into force on 2nd December 2004. |
| |
|
| |
|