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122 | Meaning of “the applicable amount of the loss” |
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(1) | This section defines “the applicable amount of the loss” for the purposes of |
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(2) | “The applicable amount of the loss” is— |
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(a) | the amount of the loss, or |
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(b) | if less, the amount arising from the relevant connection (see subsections |
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(a) | the loss has a capital allowances connection, but |
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(b) | the business does not have a relevant agricultural connection, |
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| the amount arising from the relevant connection is the amount (“the net capital |
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allowances”) by which the capital allowances exceed the charges under CAA |
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(a) | the business has a relevant agricultural connection, but |
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(b) | the loss does not have a capital allowances connection, |
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| the amount arising from the relevant connection is the amount of the allowable |
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(a) | the loss has a capital allowances connection, and |
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(b) | the business has a relevant agricultural connection, |
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| the amount arising from the relevant connection is the sum of the net capital |
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allowances and the amount of the allowable agricultural expenses. |
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123 | Meaning of “the loss has a capital allowances connection” and “the business |
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has a relevant agricultural connection” |
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(1) | This section applies for the purposes of sections 120 and 122. |
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(2) | The loss has a capital allowances connection if, in calculating the loss— |
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(a) | the amount of the capital allowances treated as expenses of the |
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(b) | the amount of any charges under CAA 2001 treated as receipts of the |
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(3) | The business has a relevant agricultural connection if— |
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(a) | the business is carried on in relation to land that consists of or includes |
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an agricultural estate, and |
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(b) | allowable agricultural expenses deducted in calculating the loss are |
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attributable to the estate. |
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(4) | “Agricultural estate” means land— |
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(a) | which is managed as one estate, and |
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(b) | which consists of or includes land occupied wholly or mainly for |
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(5) | “Allowable agricultural expenses”, in relation to an agricultural estate, means |
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any expenses attributable to the estate which are deductible— |
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(a) | in respect of maintenance, repairs, insurance or management of the |
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(b) | otherwise than in respect of interest payable on a loan. |
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(6) | But expenses attributable to the parts of the estate used wholly for purposes |
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other than those of husbandry are to be ignored. |
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(7) | And if parts of the estate are used both— |
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(a) | for purposes of husbandry, and |
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| the expenses in respect of those parts are to be reduced so far as those parts are |
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used for the other purposes. |
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(1) | A claim for property loss relief against general income must be made on or |
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before the first anniversary of the normal self-assessment filing date for the tax |
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year specified in the claim. |
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(2) | If a loss has previously been carried forward under section 118, the claim must |
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be accompanied by the amendments of any return made under— |
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(a) | section 8 of TMA 1970, or |
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(b) | section 8A of TMA 1970, |
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| that are necessary to give effect to section 118(5) (reducing the amount of the |
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loss carried forward (if necessary, to nil)). |
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Post-cessation property relief |
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125 | Post-cessation property relief |
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(1) | A person may make a claim for post-cessation property relief if, after |
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permanently ceasing to carry on a UK property business (whether carried on |
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alone or in partnership)— |
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(a) | the person makes a qualifying payment, or |
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(b) | a qualifying event occurs in relation to a debt owed to the person, |
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| and the payment is made, or the event occurs, within 7 years of that cessation. |
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(2) | If the claim is made in respect of a payment, the claim is for the payment to be |
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deducted in calculating the person’s net income for the tax year in which the |
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payment is made (see Step 2 of the calculation in section 23). |
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(3) | If the claim is made in respect of an event, the claim is for the appropriate |
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amount of the debt to be deducted in calculating the person’s net income for |
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the relevant tax year (see Step 2 of the calculation in section 23). |
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(4) | The claim must be made on or before the first anniversary of the normal self- |
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assessment filing date for the tax year for which the deduction is to be made. |
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(a) | the person is a company within the charge to income tax under Chapter |
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3 of Part 3 of ITTOIA 2005 in respect of a UK property business, and |
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(b) | the company ceases at any time to be within that tax charge in respect |
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| the company is treated for the purposes of this section as permanently ceasing |
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to carry on the business at that time. |
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(6) | The following provisions apply for the purposes of post-cessation property |
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relief as they apply for the purposes of post-cessation trade relief (but as if any |
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reference to a trade were to a UK property business)— |
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(a) | section 97 (meaning of “qualifying payment”), |
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(b) | section 98 (meaning of “qualifying event” etc), |
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(c) | section 99 (reduction of relief for unpaid trade expenses), and |
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(d) | section 100 (prohibition against double counting). |
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126 | Treating excess post-cessation property relief as CGT loss |
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A person who cannot deduct all of an amount under a claim for post-cessation |
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property relief may be able to treat the unused part as an allowable loss for |
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capital gains tax purposes: see sections 261D and 261E of TCGA 1992. |
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Furnished holiday accommodation |
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127 | UK furnished holiday lettings business treated as trade |
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(1) | This section applies if, in a tax year, a person carries on a UK furnished holiday |
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(2) | “UK furnished holiday lettings business” means a UK property business which |
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consists of, or so far as it includes, the commercial letting of furnished holiday |
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accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005). |
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(3) | For the purposes of this Part (but as modified below) the person is treated |
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instead as carrying on in the tax year a single trade— |
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(a) | which consists of every commercial letting of furnished holiday |
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accommodation comprised in the person’s UK furnished holiday |
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(b) | the profits of which are chargeable to income tax. |
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(4) | Chapter 2 applies as if section 75 (trade leasing allowances given to |
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individuals) were omitted. |
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(5) | Early trade losses relief is not available to an individual for a loss made in a tax |
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year if the individual first let any of the relevant accommodation as furnished |
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accommodation more than 3 years before the beginning of the tax year. |
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(6) | Accommodation is relevant if the trade that is treated as carried on in the tax |
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year consists of or includes the letting of the accommodation. |
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(7) | If there is a letting of accommodation only part of which is furnished holiday |
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accommodation, just and reasonable apportionments are to be made for the |
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purpose of determining what is comprised in the trade treated as carried on. |
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Losses in an employment or office |
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128 | Employment loss relief against general income |
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(1) | A person may make a claim for employment loss relief against general income |
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(a) | is in employment or holds an office in a tax year, and |
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(b) | makes a loss in the employment or office in the tax year (“the loss- |
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(2) | The claim is for the loss to be deducted in calculating the person’s net income— |
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(a) | for the loss-making year, |
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(b) | for the previous tax year, or |
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| (See Step 2 of the calculation in section 23.) |
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(3) | If the claim is made in relation to both tax years, the claim must specify the year |
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for which a deduction is to be made first. |
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(4) | Otherwise the claim must specify either the loss-making year or the previous |
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(5) | The claim must be made on or before the first anniversary of the normal self- |
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assessment filing date for the loss-making year. |
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(6) | Nothing in this section prevents a person who makes a claim specifying a |
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particular tax year in respect of a loss from making a further claim specifying |
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the other tax year in respect of the unused part of the loss. |
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(7) | This Chapter is subject to paragraph 2 of Schedule 1B to TMA 1970 (claims for |
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loss relief involving two or more years). |
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(8) | This section needs to be read with section 129 (how relief works). |
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(1) | This subsection explains how the deductions are to be made. |
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| The amount of the loss to be deducted at any step is limited in accordance with |
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| Deduct the loss in calculating the person’s net income for the specified tax year. |
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| This step applies only if the claim is made in relation to both tax years. |
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| Deduct the part of the loss not deducted at Step 1 in calculating the person’s |
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net income for the other tax year. |
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(2) | There is a priority rule if a person— |
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(a) | makes a claim for employment loss relief against general income (“the |
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first claim”) in relation to the loss-making year, and |
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(b) | makes a separate claim in respect of a loss made in the following tax |
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year in relation to the same tax year as the first claim. |
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(3) | The rule is that priority is given to making deductions under the first claim. |
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(4) | For this purpose a “separate claim” means— |
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(a) | a claim for employment loss relief against general income, or |
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(b) | a claim for trade loss relief against general income (see sections 64 to |
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