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PART XIX
Losses
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Chapter I
Relief for Losses
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Right to repayment of tax by reference to losses.
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307.—(1) Subject to the provisions of this section, where in any year of assessment any person has sustained a loss in any trade, profession or employment, carried on by him either solely or in partnership, or in the occupation of lands for the purposes of husbandry only, or in the occupation of woodlands in respect of which he has elected to be charged to tax under Schedule D, he shall be entitled, on making a claim in that behalf, to such repayment of tax as is necessary to secure that the aggregate amount of tax for the year ultimately borne by him will not exceed the amount which would have been borne by him if his income had been reduced by the amount of the loss.
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(2) (a) For the purposes of subsection (1) the amount of tax which would have been borne if income had been reduced by the amount of a loss shall be computed—
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(i) where the loss has been sustained by an individual, on the basis of treating the loss as reducing first the appropriate income of the individual, then the other income of the individual, then the appropriate income of the individual's wife or husband and then the other income of the individual's wife or husband, and
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(ii) where the loss has been sustained in a trade carried on by a body corporate, on the basis of treating the loss as reducing first the income of the body corporate from profits or gains of the trade in which the loss was sustained and then the other income of the body corporate.
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(b) For the purposes of paragraph (a) (i), “appropriate income” means either earned or unearned income according as income arising during the same period as the loss to the person sustaining it from the same activity would have been that person's earned or unearned income.
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(3) Except as is otherwise provided by section 216 (2), the amount of a loss sustained in an activity shall, for the purposes of this section, be computed in like manner as profits or gains arising or accruing from the activity would be computed under the relevant provisions of this Act.
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(4) Where repayment has been made to a person for any year under this section—
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(a) no portion of the loss which, in the computation of the repayment, was treated as reducing his income shall be taken into account in computing the amount of an assessment for any subsequent year, and
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(b) so much of the loss as was required, by subsection (2), to be treated as reducing income of a particular class or income from a particular source, shall for all the purposes of this Act, be regarded as a deduction to be made from income of that class or from income from that source, as the case may be, in computing the person's total income for the year.
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(5) Any claim to repayment under this section shall be made, in a form prescribed by the Revenue Commissioners, not later than two years after the end of the year of assessment and shall be made to, and determined by, the inspector, but any person aggrieved by any determination of the inspector on any such claim may, on giving notice in writing to the said inspector within twenty-one days after notification to him of the determination, appeal to the Special Commissioners.
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(6) The Special Commissioners shall hear and determine an appeal to them under subsection (5) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
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