[F118ZJCommencement: the first restricted yearU.K.
(1)This section applies where the year of assessment referred to in section 118ZE(1) is a year of assessment the basis period for which includes 10 February 2004 (“the first restricted year”).
(2)If this section would (but for this subsection) apply in relation to more than one year of assessment as respects the same individual and the same trade, it applies only in relation to the first of those years of assessment and “the first restricted year” means that year of assessment.
(3)Where this section applies, section 118ZE(2) shall have effect as if for the words from “only to the extent that” there were substituted only to the extent that the total amount given under section F2. . . 380 and 381 in respect of losses sustained by him in the trade F2. . . in that year of assessment does not exceed the sum of—
(a)the pre-announcement allowance, and
(b)the post-announcement allowance.
(4)The “pre-announcement allowance” is F3. . . —
(a)the loss (if any) sustained by the individual in the trade in the period beginning with the start of the basis period for the first restricted year and ending with 9 February 2004, F4. . .
(b)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)The “post-announcement allowance”is so much of—
(a)the loss (if any) sustained by the individual in the trade in the period beginning with 10 February 2004 and ending with the end of the basis period for the first restricted year, F5. . .
(b)F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
as does not exceed the individual’s contribution to the trade as at the end of the year of assessment, computed in accordance with section 118ZG.
(6)In each of subsections (4)(a) and (5)(a), the reference to the loss sustained by the individual in the trade in the period there mentioned is a reference to his share of any losses of the partnership arising for that period from the trade, and—
(a)subject to subsection (7), the losses of the partnership arising for that period from the trade shall be computed in the same way as if the period were one for which profits and losses had to be computed for the purposes of section 111(2), and
(b)subject to subsection (8), the individual’s share of the losses shall be determined according to his interest in the partnership during that period.
(7)In computing for the purposes of subsection (6) the losses of the partnership arising for the period mentioned in subsection (4)(a) or (5)(a)—
(a)any capital allowance treated as an expense of the trade for the purposes of the computation required by section 111(2) for the first restricted year is to be regarded as belonging to the period mentioned in subsection (4)(a) unless the capital expenditure to which it relates is incurred after 9 February 2004, and
(b)any amount deducted under section 42(1) of the Finance (No. 2) Act 1992 for the purposes of that computation is to be regarded as belonging to the period mentioned in subsection (4)(a) unless the expenditure to which it relates is incurred after 9 February 2004.
(8)If the individual had an interest in the partnership at any time that falls within—
(a)the basis period for the first restricted year, and
(b)the period beginning with 10 February 2004 and ending with 25 March 2004,
he shall be deemed for the purposes of subsection (6)(b) to have had the interest on 9 February 2004.]
Textual Amendments
F1Ss. 118ZE-118ZK and preceding cross-heading inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 124(1)
F2Words in s. 118ZJ(3) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by Finance Act 2005 (c. 7), s. 72(6)(a)(12), Sch. 11 Pt. 2(4), Note
F3Words in s. 118ZJ(4) repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by Finance Act 2005 (c. 7), s. 72(6)(b)(i)(12), Sch. 11 Pt. 2(4), Note
F4S. 118ZJ(4)(b) and preceding word repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by Finance Act 2005 (c. 7), s. 72(6)(b)(ii)(12), Sch. 11 Pt. 2(4), Note
F5S. 118ZJ(5)(b) and preceding word repealed (retrospective to 2.12.2004 with effect in accordance with s. 72(7)-(11) of the repealing Act) by Finance Act 2005 (c. 7), s. 72(6)(c)(12), Sch. 11 Pt. 2(4), Note