Taxes Consolidation Act, 1997 (Number 39 of 1997)
66 Special basis at commencement of trade or profession.
[ITA67 s58(2), (3) and (4); FA90 s14(1)(b)]
(1) Where a trade or profession has been set up and commenced within the year of assessment, the computation of the profits or gains chargeable under Case I or II of Schedule D shall be made either on the full amount of the profits or gains arising in the year of assessment or according to the average of such period, not being greater than one year, as the case may require and as may be directed by the inspector.
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(2) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within one year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement.
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(2) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within one year preceding the year of assessment shall be charged—
(a) if only one account was made up to a date within the year of assessment and that account was for a period of one year, on the full amount of the profits or gains of the year ending on that date,
(b) if—
(i) an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment or more accounts than one were made up to dates in the year of assessment, and
(ii) the trade or profession was set up and commenced not less than 12 months before the first-mentioned date in subparagraph (i) or, as the case may be, the last of the second-mentioned dates in that subparagraph,
on the full amount of the profits or gains of the year ending on that first-mentioned date or, as the case may be, the last of those second-mentioned dates, or
(c) in any other case, on the full amount of the profits or gains of the year of assessment.
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(3) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year next before the year preceding the year of assessment shall be entitled, [2]>on giving notice in writing to the inspector with the return required under section 951 for the year of assessment, to have the assessment<[2][2]>on including a claim in that behalf with the return required under [4]>section 951<[4][4]>Chapter 3 of Part 41A<[4] for the year of assessment<[2] reduced by the amount (if any) by which the amount of the assessment for the year preceding the year of assessment exceeds the full amount of the profits or gains of that preceding year; but, where the excess is greater than the amount of the assessment, the difference between the excess and the amount of the assessment shall be treated for the purposes of section 382 as if it were a loss sustained in a trade in that year of assessment.
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(3A) As respects the year of assessment 2001, subsection (2) shall apply as if in both paragraph (a) and paragraph (b) of that subsection “74 per cent of the full amount of the profits or gains” were substituted for “the full amount of the profits or gains”.
(3B) As respects the year of assessment 2002—
(a) subsection (2) shall apply as if “within the period from 6 April 2001 to 31 December 2001” were substituted for “within one year preceding the year of assessment”, and
(b) subsection (3) shall apply as if “within the period from 6 April 2000 to 5 April 2001” were substituted for “within the year next before the year preceding the year of assessment”.
(3C) As respects the year of assessment 2003, subsection (3) shall apply as if “within the period from 6 April 2001 to 31 December 2001” were substituted for “within the year next before the year preceding the year of assessment”.
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Substituted by FA98 s8. Applies as respects the year of assessment 1998-99 and subsequent years of assessment.
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Substituted by FA01 s78(2)(a). Applies as respects the year of assessment 2001 and subsequent years and as respects accounting periods of companies ending on or after 1 April 2001.