Finance Act 2012

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Provisions in relation to property incentives and capital allowances.

17.— Part 12 of the Principal Act is amended by substituting the following for Chapter 4A (inserted by section 23 of the Finance Act 2011 ):

“Chapter 4A

Termination of carry forward of certain losses

Interpretation and general (Chapter 4A).

409F.— (1) This Chapter applies notwithstanding any other provision of the Tax Acts.

(2) In this Chapter—

‘active partner’ has the same meaning as in section 409A;

‘active trader’ has the same meaning as in section 409D;

‘area-based capital allowance’ means any allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied—

(a) by section 323, 331, 332, 341, 342, 343, 344, 352, 353, 372C, 372D, 372M, 372N, 372V, 372W, 372AC or 372AD for a chargeable period, or

(b) by virtue of paragraph 11 of Schedule 32 for a chargeable period,

including any such allowance, or part of any such allowance, made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9;

‘balancing allowance’ and ‘balancing charge’ mean any allowance or charge, as the case may be, made under section 274;

‘capital allowance’ means any allowance, or part of such allowance, specified in the definition of ‘area-based capital allowance’ or ‘specified capital allowance’;

‘chargeable period’ has the same meaning as in section 321 and a reference to a chargeable period or its basis period shall be construed in accordance with subsection (2) of that section;

‘relevant accounting period’ means the later of—

(a) the accounting period which begins immediately after the accounting period in which the tax life of the building or structure has ended, or

(b) the accounting period, or the first accounting period if there are more than one, ending in 2015;

‘relevant chargeable period’ means the later of—

(a) the chargeable period which begins immediately after the chargeable period in which the tax life of the building or structure has ended, or

(b) the chargeable period, or the first chargeable period if there are more than one, ending in 2015;

‘relevant tax year’ means the later of—

(a) the tax year which begins immediately after the tax year in which the tax life of the building or structure has ended, or

(b) the tax year 2015;

‘specified capital allowance’ means any specified relief that is—

(a) a writing down allowance or a balancing allowance made for a chargeable period, or

(b) an allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied by section 372AX, 372AY, 843 or 843A for a chargeable period,

including any such allowance or part of such allowance made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9;

‘specified relief’ has the same meaning as in section 485C;

‘tax life’, in relation to a building or structure, means the appropriate period referred to in section 272(4) in respect of that building or structure, after the end of which period no capital allowance may be made following the disposal of the relevant interest (within the meaning of section 269) in that building or structure;

‘tax year’ means a year of assessment;

‘writing down allowance’ means any allowance made under section 272 and includes any such allowance as increased under section 273.

Termination of capital allowances.

409G.— (1) As respects any tax year, the amount of any specified capital allowance, in relation to a building or structure, that is available to be carried forward, in accordance with section 304 or 305, to a relevant tax year or to any subsequent tax year, shall, subject to subsections (5) and (6), be zero for all the purposes of the Tax Acts.

(2) As respects any accounting period, the amount of any specified capital allowance, in relation to a building or structure, that—

(a) is available to be carried forward to a relevant accounting period, or to any subsequent accounting period, in accordance with section 308(3), or

(b) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,

shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.

(3) As respects any tax year, the amount of any area-based capital allowance, in relation to a building or structure, that is available to be carried forward to a relevant tax year or to any subsequent tax year, in accordance with section 304 or 305, as those provisions are applied or modified by any other provision of the Tax Acts shall, subject to subsections (5) and (6), be zero for all the purposes of those Acts.

(4) As respects any accounting period, the amount of any area-based capital allowance, in relation to a building or structure, that—

(a) is available to be carried forward to a relevant accounting period or to any subsequent accounting period, in accordance with section 308(3), or

(b) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,

shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.

(5) Subsections (1) and (3) shall not apply to an individual where any capital allowance is made in taxing a trade in relation to which trade the individual is an active partner or an active trader.

(6) Notwithstanding subsections (1) to (4), where in a relevant chargeable period or a subsequent chargeable period a balancing charge falls due to be made on a person in relation to any building or structure, any capital allowance in relation to that building or structure which would, but for those subsections, have been carried forward to that chargeable period may be set against that balancing charge and against no other income, profits or gains in that or any subsequent or preceding chargeable period.”.