409F Interpretation and general (Chapter 4A)

(1) This Chapter applies notwithstanding any other provision of the Acts.

(2) The following definitions are used in this Chapter.

“active partner” has the same meaning as in section 409A. This means in a trading partnership, the partner who works for the greater part of his/her time in the day-to-day management or conduct of the trade;

“active trader” has the same meaning as in section 409D. This is the individual who spends the greater part of his/her time working in, or in the management of the trade;

“area-based capital allowance” is a reference to all of the accelerated capital allowances provided for under any of the designated area or urban or rural renewal schemes. It also includes all of the older schemes, which have formally ended or have been replaced in more recent times. Finally, these allowances also include allowances given in an earlier period and carried forward into a later one;

“balancing allowance” or “balancing charge” mean any allowance or charge made under section 274. This is a reference to the allowance or charge which may apply upon the sale of a capital asset;

“capital allowance” means any of the allowances referred to in the definition of area-based capital allowance or specified capital allowance;

“chargeable period” has the same meaning as in section 321. This essentially means a year of assessment or its basis period for an individual and a period of account for a company;

“relevant accounting period” in relation to a company, means the later of the accounting period immediately after the one in which the tax life of the building has ended or the accounting period ending in 2015. This latter period is qualified in the case of a company, which has more than one accounting period ending in 2015. In such cases it is the first of these accounting periods;

“relevant chargeable period” applies to both individuals and companies and means the later of the chargeable period immediately after the one in which the tax life of the building has ended or the chargeable period ending in 2015. This latter period is qualified in the case of a company, which has more than one chargeable period ending in 2015. In such cases it is the first of these chargeable periods;

“relevant tax year” in relation to an individual means the later of the tax year immediately after the one in which the tax life of the building has ended or 2015;

“specified capital allowance” means any specified relief, being a writing down allowance, a balancing allowance or any of the other property-based accelerated capital allowances provided for and includes any unused amount of such allowances carried forward from one chargeable period into a subsequent one in accordance with Part 9;

“specified relief” has the same meaning as in section 485C. This is a reference to the reliefs which are restricted under the high earners restriction;

“tax life” in relation to a building, means the appropriate period mentioned in section 272(4) after which no capital allowances may be given to a subsequent purchaser. This period can vary for different types of buildings and under different schemes;

“tax year” means a year of assessment;

“writing down allowance” means any allowance provided for under section 272 and includes an allowance as increased under section 273. This is the annual allowance, which may be written off against income in respect of a range of industrial buildings or structures and also includes circumstances in which “free depreciation” is or was allowed.

Relevant Date: Finance Act 2021