Corporation Tax Act, 1976
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Income tax relief for losses incurred in 1974-75 and 1975-76. |
181.—(1) Where a company claims relief under section 307 of the Income Tax Act, 1967 (right to repayment of tax by reference to losses), for the year 1974-75 or the year 1975-76 the question whether the company has sustained a loss in a trade in that year, and any question as to the amount of a loss so sustained, shall not be affected by the company being within the charge to corporation tax in respect of the trade for the whole or part of that year, but the amount of loss incurred in the trade in an accounting period falling wholly or partly within that year shall, for the purposes of corporation tax, be reduced by an amount equal to the amount of loss which, in respect of the said accounting period, was taken into account in determining the amount of loss in respect of which relief was allowed under the said section 307. | |
(2) Section 318 of the Income Tax Act, 1967 (option to treat capital allowances as creating or augmenting loss), shall apply in relation to a claim by a company under section 307 of that Act for the year 1975-76 and for the purposes of the said section 318, as applied by this subsection, the company shall be treated, in a case where the year 1975-76 is not the basis year for the year itself, on the footing that— | ||
(a) section 1 (2) (introduction for companies of corporation tax) did not apply in relation to the trade in question, and | ||
(b) the period on the profits or gains of which income tax for the year 1976-77 would fall to be finally computed were the twelve months starting at the time at which the company came within the charge to corporation tax in respect of the trade, | ||
and relief under the said section 318 may be given accordingly by reference to what, on that footing, would have been the company's capital allowances for the year 1976-77 for income tax purposes. | ||
(3) The total amount of allowances in respect of capital expenditure which under section 14 (deductions and additions for capital allowances and charges) fall to be treated as trading expenses of a trade for the appropriate accounting periods for which the company is within the charge to corporation tax in respect of the trade shall be reduced by an amount equal to the amount of capital allowances which by virtue of subsection (2) of this section is deducted in determining the amount of loss in respect of which relief is allowed under section 307 of the Income Tax Act, 1967 ; and the appropriate accounting periods shall be accounting periods falling wholly or partly within the year 1975-76, the reduction being made in an earlier, rather than a later, accounting period. | ||
(4) For purposes of this section “trade” includes profession or employment, the occupation of lands for the purposes of husbandry only and the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits. |