(1)Sideways relief is not available to an individual for so much of a loss as derives from a trade leasing allowance unless the individual meets the time commitment test.
(2)A trade leasing allowance is an allowance made under Part 2 of CAA 2001 in respect of—
(a)expenditure incurred on the provision of plant or machinery for leasing in the course of a trade, or
(b)expenditure incurred on the provision for the purposes of a trade of an asset which is not to be leased but which is fee-producing.
(3)An asset is fee-producing if payments in the nature of—
(a)royalties, or
(b)licence fees,
are to arise from rights granted by the individual in connection with the asset.
(4)To meet the time commitment test conditions A and B must be met.
(5)Condition A is that the individual must carry on the trade for a continuous period of at least 6 months beginning or ending in F1... the tax year in which the loss was made F2....
(6)Condition B is that substantially the whole of the individual's time must be given to carrying on the trade—
(a)for a continuous period of at least 6 months beginning or ending in the [F3tax year] (if the individual starts or permanently ceases to carry on the trade in the tax year (or does both)), or
(b)throughout [F4tax year] period (in any other case).
Textual Amendments
F1Words in s. 75(5) omitted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2022 (c. 3), Sch. 1 paras. 46(2)(a), 61(1)
F2Words in s. 75(5) omitted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2022 (c. 3), Sch. 1 paras. 46(2)(b), 61(1)
F3Words in s. 75(6)(a) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2022 (c. 3), Sch. 1 paras. 46(3), 61(1)
F4Words in s. 75(6)(b) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2022 (c. 3), Sch. 1 paras. 46(3), 61(1)
Modifications etc. (not altering text)
C1Ss. 75-79 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(c)
C2Ss. 75-79 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(d)
Sideways relief is not available to an individual for so much of a loss as derives from [F6an annual investment allowance or] a first-year allowance under Part 2 of CAA 2001 if either section 77 or 78 applies.
Textual Amendments
F5Words in s. 76 heading inserted (21.7.2008 with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 21(b)
F6Words in s. 76 inserted (21.7.2008 with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 21(a)
Modifications etc. (not altering text)
C1Ss. 75-79 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(c)
C2Ss. 75-79 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(d)
(1)This section applies if—
(a)the first-year allowance is in respect of expenditure incurred at any time on the provision of plant or machinery for leasing in the course of a qualifying activity, and
(b)either the qualifying activity was at that time carried on by the individual in partnership with a company or arrangements have been made with a view to the activity being so carried on.
(2)It does not matter—
(a)if the firm includes other partners, or
(b)when the arrangements were made.
(3)For the purposes of this section—
(a)letting a ship on charter is treated as leasing the ship, and
(b)references to making arrangements include effecting schemes.
Modifications etc. (not altering text)
C1Ss. 75-79 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(c)
C2Ss. 75-79 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(d)
(1)This section applies if—
(a)the [F8annual investment allowance or] first-year allowance is made in connection with a relevant qualifying activity or a relevant asset (see subsections (2) and (3)), and
(b)arrangements within subsection (4) have been made.
(2)A qualifying activity is a relevant one if—
(a)at the time when the expenditure was incurred, the activity was carried on by the individual as a partner in a firm, or
(b)at a later time, it has been carried on by the individual as a partner in a firm or transferred to a person connected with the individual.
(3)An asset is a relevant one if, after the time when the expenditure was incurred, the asset was transferred by the individual—
(a)to a person connected with the individual, or
(b)to a person at a price lower than its market value.
(4)Arrangements are within this subsection if as a result of them—
(a)the sole benefit, or
(b)the main benefit,
that might be expected to arise to the individual from the transaction under which the expenditure was incurred is the obtaining of a reduction in tax liability by means of sideways relief.
(5)It does not matter when the arrangements were made.
(6)References to making arrangements include effecting schemes.
Textual Amendments
F7Words in s. 78 heading inserted (21.7.2008 with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 22(b)
F8Words in s. 78(1)(a) inserted (21.7.2008 with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 22(a)
Modifications etc. (not altering text)
C1Ss. 75-79 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(c)
C2Ss. 75-79 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(d)
(1)If relief is given in a case to which section 75 or 76 applies, the relief is withdrawn by the making of an assessment to income tax under this section.
(2)Expressions which are used—
(a)in any of sections 75 to 78, and
(b)in Part 2 of CAA 2001,
have the same meaning in those sections as in that Part.
Modifications etc. (not altering text)
C1Ss. 75-79 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 6 para. 1(11)(c)
C2Ss. 75-79 applied (10.6.2021) by Finance Act 2021 (c. 26), Sch. 2 para. 3(1)(d)