3(1)For the purposes of computing the amount of profits F1... in respect of which Class 4 contributions are payable, relief shall be available under, and in the manner provided by, the following provisions of [F2ITA 2007]—N.I.
(a)[F3sections 64 and 72] (set-off of trade losses against general income), but only where loss arises from activities the profits F1... of which would be brought into computation for the purposes of Class 4 contributions;
F4(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)[F5section 83] (carry-forward of loss against subsequent profits); and
(d)[F6section 89] (carry-back of terminal losses).
(2)The following relief provisions F7... shall not apply, that is to say—
(a)Chapter I of Part VII [F8of the Act of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458 and 459 of ITA 2007] (personal reliefs);
(b)[F9section 383 of ITA 2007] (relief for payment of interest);
F10(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d)[F11sections 88 and 94 of ITA 2007] (treatment of interest as a loss for purposes of carry-forward or carry-back);
F12. . . and
(f)sections 619 and 620 (premiums or other consideration under annuity contracts and trust schemes).
(3)Where in the year 1989-90 or any previous year of assessment for which a person claims and is allowed relief by virtue of sub-paragraph (1) above—
(a)there falls to be made in computing his total income for income tax purposes, or that of his spouse, a deduction in respect of any loss, and
(b)the deduction or part of it falls to be so made from income other than profits or gains of a trade, profession or vocation,
the amount of the deduction made from the other income shall be treated as reducing the person’s profits or gains (that is to say the profits or gains of any relevant trade, profession or vocation as computed for the purpose of the charge to Class 4 contributions) for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not he claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).
(4)Where in the year 1990-1991 or any subsequent year of assessment for which a person claims and is allowed relief by virtue of sub-paragraph (1) above there falls to be made in computing his [F13net income] for income tax purposes a deduction in respect of any loss in any relevant trade, profession or vocation—
(a)the amount of the deduction shall, as far as may be, be treated for the purpose of the charge to Class 4 contributions as reducing the person’s profits F14... for that year of any relevant trade, profession or vocation, and
(b)any excess shall be treated for that purpose as reducing such profits F14... for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not the person claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).
(5)Relief shall be allowed, in respect of—
F15(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)payments under [F16section 383 of ITA 2007] (relief for payment of interest), being payments for which relief from income tax is or can be given,
so far as incurred wholly or exclusively for the purposes of any relevant trade, profession or vocation, by way of deduction from or set-off against profits F14... chargeable to Class 4 contributions for the year in which the payments are made; and, in the case of any insufficiency of the profits F14... of that year, the payments shall be carried forward and deducted from or set off against the profits F14... of any subsequent year (being deducted or set off as far as may be from or against the profits F14... of the immediately following year, whether or not relief can be claimed under this paragraph for that year, and so far as it cannot be so deducted, from or against those of the next year, and so on).
Textual Amendments
F1Words in Sch. 2 para. 3(1) repealed (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 425(4), Sch. 3 (with Sch. 2)
F2Words in Sch. 2 para. 3(1) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(a)(i) (with Sch. 2)
F3Words in Sch. 2 para. 3(1)(a) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(a)(ii) (with Sch. 2)
F4Sch. 2 para. 3(1)(b) repealed (8.9.1998) by 1998 c. 14, ss. 59(3), 86(2), Sch. 8; S.I. 1998/2209, art. 2(a), Sch. Pt. I (subject to saving in art. 3)
F5Words in Sch. 2 para. 3(1)(c) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(a)(iii) (with Sch. 2)
F6Words in Sch. 2 para. 3(1)(d) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(a)(iv) (with Sch. 2)
F7Words in Sch. 2 para. 3(2) repealed (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(b)(i), Sch. 3 Pt. 1 (with Sch. 2)
F8Words in Sch. 2 para. 3(2)(a) inserted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(b)(ii) (with Sch. 2)
F9Words in Sch. 2 para. 3(2)(b) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(b)(iii) (with Sch. 2)
F10Sch. 2 para. 3(2)(c) repealed (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(b)(iv), Sch. 3 Pt. 1 (with Sch. 2)
F11Words in Sch. 2 para. 3(2)(d) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(b)(v) (with Sch. 2)
F12Words in Sch. 2 para. 3(2) repealed (29.4.1996 with effect in relation to the year 1996-97 and subsequent years of assessment) by 1996 c. 8, ss. 147(2)(b)(3), 205, Sch. 41 Pt. V(15) Note
F13Words in Sch. 2 para. 3(4) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(c) (with Sch. 2)
F14Words in Sch. 2 para. 3(4)(5) repealed (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 425(4), Sch. 3 (with Sch. 2)
F15Sch. 2 para. 3(5)(a) repealed (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(d)(i), Sch. 3 Pt. 1 (with Sch. 2)
F16Words in Sch. 2 para. 3(5)(b) substituted (with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 293(3)(d)(ii) (with Sch. 2)