42Carry-back of relief
(1)In paragraph 2 of Schedule 5 to the [1983 c. 28.] Finance Act 1983, at the beginning of sub-paragraph (3) (which provides that relief is to be given as a deduction from income for the year in which the relevant shares are issued) there shall be inserted the words "Subject to sub-paragraph (4A) below"; and after sub-paragraph (4) there shall be inserted—
“(4A)If—
(a)the shares are issued before 6th October in a year of assessment, and
(b)the claimant so requests in his claim for relief,
the relief shall be given partly by way of deduction from the claimant's total income for the year of assessment in which the shares are issued and partly by way of deduction from his total income for the preceding year of assessment.
(4B)A deduction from the claimant's total income for the year of assessment preceding that in which the shares are issued shall be of such amount as may be specified in the claim, but—
(a)that amount shall not exceed one half of the total relief in respect of the shares, and
(b)the aggregate of that amount and the amounts of any other deductions made by virtue of sub-paragraph (4A) above from the claimant's total income for the year of assessment preceding that in which the shares are issued shall not exceed £5,000.”.
(2)For sub-paragraph (9) of paragraph 2 of that Schedule there shall be substituted—
“(9)Section 52(7) of Chapter II shall apply, but with the deletion of the reference to section 204(3) of the Taxes Act (pay as you earn).
(10)Where effect is given to a claim for relief by repayment of tax, section 47 of the [1975 c. 45.] Finance (No. 2) Act 1975 (repayment supplement) shall have effect in relation to the repayment as if the time from which the twelve months mentioned in subsections (1)(a) and (4)(a) of that section are to be calculated were the end of the year of assessment in which the shares are issued or, if the period mentioned in sub-paragraph (4)(a) above ends in a later year, the end of that later year.”.
(3)For sub-paragraph (2) of paragraph 3 of that Schedule there shall be substituted—
“(2)No more than £40,000 may be deducted by way of relief under paragraph 2 above from the total income of an individual for a year of assessment.”.
(4)In paragraph 12 of that Schedule, after sub-paragraph (2) there shall be added—
“(3)Section 60(4) and (5) of Chapter II shall apply in relation to the limit of £5,000 imposed by paragraph 2(4B) above as it applies in relation to the limit of £40,000 imposed by paragraph 3(2) above; and for this purpose the reference in section 60(5) to a division in proportion to the amounts subscribed by the husband and the wife shall be construed as a reference to a division in proportion to the aggregate amounts of the relevant deductions sought by each of them in their claims under paragraph 2(4A) above.”.
(5)In paragraph 14 of that Schedule, after sub-paragraph (1) there shall be inserted—
“(1A)Where by virtue of paragraph 2(4A) above relief has been given for each of two consecutive years of assessment, any withdrawal of relief shall be made for the first of those years before being made for the second.”.
(6)This section shall have effect in relation to shares issued on or after 6th April 1987.