Finance Act 1994

The Taxes Act 1988U.K.

1U.K.In section 257A(6) of the Taxes Act 1988 (relief confined to one deduction), for “deduction” there shall be substituted “ income tax reduction ”.

2(1)In subsections (1) and (2) of section 257BA of that Act (elections as to transfer of relief under section 257A)—U.K.

(a)for the words “to deduct from her total income”, in each place where they occur, there shall be substituted “ to an income tax reduction calculated by reference to ”; and

(b)for the words “that he is entitled to deduct under section 257A”, in each place where they occur, there shall be substituted “ by reference to which the calculation of the income tax reduction to which he is entitled under section 257A is to be made ”.

(2)In subsection (3) of that section—

(a)for “to deduct from his total income” there shall be substituted “ to an income tax reduction calculated by reference to ”;

(b)for “the amount, if any, that he is already entitled to deduct” there shall be substituted “ any income tax reduction to which he is already entitled ”; and

(c)for “that she is entitled to deduct by virtue of that election” there shall be substituted “ by reference to which the calculation of the income tax reduction to which she is entitled by virtue of that election is to be made ”.

(3)Any election made for the purposes of section 257BA of the Taxes Act 1988 which—

(a)has been made before the coming into force of this paragraph, and

(b)apart from this paragraph, would have effect in accordance with that section for the year 1994-95 or any subsequent year,

shall so have effect as if it were an election for the purposes of that section as amended by this paragraph.

3(1)In subsection (1) of section 257BB of that Act (transfer of relief where it is not all used), for paragraph (b) and the words after that paragraph there shall be substituted—U.K.

“(b)the amount of the reduction to which he is entitled is determined in accordance with section 256(2)(b) or, by virtue of his having no income tax liability to which that reduction is applicable, is nil,

his wife shall be entitled (in addition to any reduction to which she is entitled by virtue of an election under section 257BA) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which her husband’s income tax reduction fell to be calculated in pursuance of section 257A and any election under section 257BA. ”

(2)In subsection (3) of that section, for paragraph (b) and the words after that paragraph there shall be substituted—

“(b)the amount of the reduction to which she is entitled is determined in accordance with section 256(2)(b) or, by virtue of her having no income tax liability to which that reduction is applicable, is nil,

her husband shall be entitled (in addition to any other reduction to which he is entitled by virtue of section 257A) to an income tax reduction calculated by reference to an amount equal to the unused part of the amount by reference to which his wife’s income tax reduction fell to be calculated in pursuance of that election. ”

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(4)Subsection (6) of that section (calculation of amount left after deductions of a person’s total income) shall cease to have effect.

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