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Changes relating to tax relief for lessors, carried forward losses and balancing charges.
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16.— (1) Section 372AP of the Principal Act is amended—
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(a) in subsection (1) by deleting the definition of “relevant day”,
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(b) in subsection (1), in paragraph (b)(ii) of the definition of “relevant period”, by substituting “after the date of such completion;” for “after the date of such completion,”,
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(c) in subsection (1), in the definition of “relevant period”, by deleting all of the words from “but in relation to a premises” to the end of the definition,
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(d) in subsection (2) by substituting “Subject to subsections (3), (4) and (5),” for “Subject to subsections (3), (4), (5), (8A), (8B) and (8C),”,
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(e) in subsection (3) by deleting paragraph (c),
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(f) in subsection (7) by substituting the following for “an amount as rent from that premises equal to the amount of that deduction or, as the case may be, the aggregate amount of those deductions.”:
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“an amount as rent from that premises equal to the amount determined by the formula—
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A - B
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where—
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A is the amount of the deduction or, as the case may be, the aggregate amount of the deductions under subsection (2) in respect of eligible expenditure incurred on or in relation to the premises, and
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B is that part of the amount of any excess (within the meaning of section 384) that is attributable to the deduction or, as the case may be, the aggregate amount of the deductions under subsection (2) in respect of eligible expenditure incurred on or in relation to the premises and which has been carried forward under section 384 to the year of assessment in which either of the events, referred to in paragraphs (a) and (b), occurs.”,
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(g) in subsection (8) by deleting paragraph (c), and
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(h) by deleting paragraphs (8A), (8B), (8C) and (8D).
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(2) Section 384 of the Principal Act is amended by inserting the following after subsection (2):
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“(2A) Where section 372AP(7) applies, the amount of the excess, which by virtue of subsection (2) has been carried forward to a year of assessment in which either of the events referred to in section 372AP(7) occurs, shall be reduced by the amount represented by B in the formula in that section and this section shall not apply in that year of assessment or in any subsequent year of assessment to the amount of that reduction.”.
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(3) Section 485C of the Principal Act is amended—
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(a) in subsection (1), in the definition of “amount of specified relief”, by inserting “but subject to subsection (1A),” after “tax year,”, and
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(b) by inserting the following after subsection (1):
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“(1A) Where a balancing charge is made under section 274, in relation to a building or structure, on an individual for a tax year, then—
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(a) to the extent that any unused capital allowances attributable to capital expenditure incurred on the construction or refurbishment of that building or structure, have been carried forward in accordance with section 304 or 305 to the tax year, and are used in that tax year to reduce the amount of the balancing charge, those allowances so used shall not be treated as an amount of specified relief under this Chapter, and
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(b) any amount by which the balancing charge has been reduced in the manner referred to in paragraph (a), shall not be taken into account for the purposes of determining the adjusted income of the individual for the tax year.”.
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(4) (a) Subsections (1)(f) and (2) apply to an event referred to in paragraph (a) or (b) of section 372AP(7) of the Principal Act that occurs on or after 1 January 2012.
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(b) Subsection (3) applies to a balancing charge (within the meaning of section 274 of the Principal Act) that is made on or after 1 January 2012.
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