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Taxes Consolidation Act, 1997 (Number 39 of 1997)

CHAPTER 4

Miscellaneous and general

304 Income tax: allowances and charges in taxing a trade, etc.

[ITA67 s241(3) and (4), s251(5), s252, s253, s254(5) and (6), s295, CTA76 s21(1) and Sch1 par6, par15, par16, par17 and par44]

(1) This section and section 305 shall apply as respects allowances and charges which are to be made under this Part[1]>as it applies<[1] for the purposes of income tax.

(2) Any claim by a person for an allowance under this Part in charging profits or gains of any description shall be included in the annual statement required to be delivered under the Income Tax Acts of those profits or gains, and the allowance shall be made as a deduction in charging those profits or gains.

(3) (a) A claim for an industrial building allowance under section 271 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance is to be made.

(b) A claim for an initial allowance under section 283 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on new machinery or new plant and giving such particulars as show that the allowance is to be made.

[7]>

(3A) (a) (i) In this subsection—

relevant period” means the period beginning on 1 January 2020 and ending on 31 December 2020;

specified allowance” means an allowance referred to in section 531AU(2);

relevant allowances” has the meaning assigned to it in paragraph (b).

(ii) For the purposes of paragraph (b), where the basis period for the year of assessment 2020 is other than the relevant period, the specified allowances of any basis period which overlaps with the relevant period shall be apportioned to the relevant period in proportion to the number of months or fractions of months in the respective periods.

(b) Where an individual carrying on a trade, either solely or in partnership, claims one or more specified allowances, or part of one or more specified allowances, in respect of the relevant period to which, but for the making of a claim under paragraph (c), effect would be given in the following year or years under subsection (4) (in this subsection referred to as the 'relevant allowances'), the individual may make a claim under paragraph (c).

(c)(i) Subject to section 395C, an individual may make a claim under this paragraph to have any portion of the relevant allowances carried back and that portion shall, for the purpose of making the assessment to income tax for the year 2019, be added to the amount of the allowances to be made under this Part in taxing the trade for that year.

(ii) Where relief is claimed under this paragraph, effect shall be given in respect of allowances from an earlier period in advance of allowances from a later period.

(iii) Allowances in respect of which a claim is made under this paragraph cannot be used, directly or indirectly, to create or augment a loss under Chapter 2 of Part 12.

(d) If and in so far as relief for relevant allowances is given to an individual under this subsection, the individual shall not be entitled to relief in respect of those relevant allowances under any other provision of the Income Tax Acts.

<[7]

(4) [2]>Subject to section 278(2),<[2] where full effect cannot be given in any year to any allowance to be made under this Part in taxing a trade[3]>, or in charging profits or gains of any description, as the case may be,<[3] owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, then, the allowance or part of the allowance to which effect has not been given, as the case may be, shall, for the purpose of making the assessment to income tax for the following year, be added to the amount of the allowances to be made under this Part in taxing the trade [4]>or in charging the profits or gains, as the case may be,<[4] for that following year, and be deemed to be part of those allowances, or, if there is no such allowance for that following year, be deemed to be the allowance for that following year, and so on for succeeding years.

(5) Any charge to be made under this Part on a person for any chargeable period in taxing the person’s trade or in charging the person’s income under Case V of Schedule D shall be made [6]>by means of an assessment in addition to any other assessment to be made on the person for that period<[6][6]>by means of an assessment or, as the case may be, an amendment of an assessment on or in relation to the person for that period<[6].

(6) (a) The preceding provisions of this section (other than subsection (3)) shall apply in relation to professions, employments and offices as they apply in relation to trades.

(b) Subsection (3)(b) shall, with any necessary modifications, apply in relation to professions as it applies in relation to trades.

[5]>

(c)Subsection (4) shall not apply as respects an allowance given by means of discharge or repayment of tax or in charging income under Case V of Schedule D.

<[5]

[1]

[-]

Deleted by FA00 s40(c)(i).

[2]

[-]

Deleted by FA00 s40(c)(ii)(I).

[3]

[+]

Inserted by FA00 s40(c)(ii)(II).

[4]

[+]

Inserted by FA00 s40(c)(ii)(III).

[5]

[+]

Inserted by FA00 s40(c)(iii).

[6]

[-] [+]

Substituted by FA13 sched1(part2)(c). Applies— (a) in the case of a chargeable period (within the meaning of section 321(2)) which is an accounting period of a company, as respects chargeable periods that start on or after 1 January 2013, and (b) in a case other than that referred to in paragraph (a), as respects the year of assessment (within the meaning of section 2(1)) 2013 and subsequent years of assessment.

[7]

[+]

Inserted by the Financial Provisions (Covid-19) (No. 2) Act 2020 s10(a).