Capital Allowances Act 1990

141Other income tax allowances

(1)This section has effect as respects any allowance which falls, under the provisions of this Act (except Part VII) as they apply for the purposes of income tax, to be given by way of discharge or repayment of tax and which is to be available primarily against a specified class of income.

(2)Subject to subsection (3) below, where such an allowance falls to be made to a person for any year of assessment—

(a)the amount of the allowance shall be deducted from or set off against income of his of the specified class for that year of assessment, and

(b)if the amount to be allowed is greater than the amount of his income of that class for that year of assessment, the balance shall be deducted from or set off against his income of that class for the next year of assessment, and so on for subsequent years of assessment, and tax shall be discharged or repaid accordingly.

(3)Where the amount of the allowance is greater than the amount of the person’s income of the specified class for the first-mentioned year of assessment, he may elect that the excess shall be deducted from or set off against his other income for that year of assessment, and it shall be deducted from or set off against that income and tax discharged or repaid accordingly, and only the excess, if any, of the amount of the allowance over all his income for that year of assessment shall be deducted from or set off against his income of the specified class for succeeding years.

An election under this subsection as respects an allowance for any year of assessment shall be made by giving notice to the inspector not later than two years after the end of that year of assessment.

(4)An election under subsection (3) above may be made for any year of assessment with respect to an allowance for the last preceding year of assessment, so far as not previously allowed, as if the allowance were or formed part of the allowance for the year for which the election is made; and in applying subsections (2) and (3) above as extended by this subsection to any allowances, relief shall be deemed to be given in respect of an allowance carried forward from an earlier year before it is given in respect of an allowance arising in a later year.

(5)Relief under this section shall be given on a claim (that is to say, a claim to which section 42 of the [1970 c. 9.] Taxes Management Act 1970 applies).

(6)Subsection (3) above shall not apply to an allowance made by virtue of section 61(1).