Income and Corporation Taxes Act 1988

Special provisions U.K.

[F1 95A Creative artists: relief for fluctuating profits U.K.

Schedule 4A (which enables individuals to make an averaging claim in respect of profits derived wholly or mainly from creative works) shall have effect.

The provisions of that Schedule apply for the year 2000-01 and subsequent years of assessment (so that the first years which may be the subject of an averaging claim are 2000-01 and 2001-02).]

Textual Amendments

F1 S. 95A inserted (11.5.2001) by Finance Act 2001 (c. 9), s. 71(1)

96 Farming and market gardening: relief for fluctuating profits. U.K.

(1) M1 Subject to the provisions of this section, a person who is or has been carrying on a trade of farming or market gardening in the United Kingdom may claim that subsection (2) or (3) below shall have effect in relation to his profits from that trade for any two consecutive years of assessment if his profits for either year do not exceed such part of his profits for the other year as is there specified.

(2) If the claimant’s profits for either year do not exceed seven-tenths of his profits for the other year or are nil, his profits for each year shall be adjusted so as to be equal to one-half of his profits for the two years taken together or, as the case may be, for the year for which there are profits.

(3) If the claimant’s profits for either year exceed seven-tenths but are less than three-quarters of his profits for the other year, his profits for each year shall be adjusted by adding to the profits that are lower and deducting from those that are higher an amount equal to three times the difference between them less three-quarters of those that are higher.

(4) No claim shall be made under this section—

(a) in respect of any year of assessment before a year in respect of which a claim has already been made under this section; or

(b) in respect of a year of assessment in which the trade is (or by virtue of section 113(1) is treated as) set up and commenced or permanently discontinued.

(5) Any adjustment under this section shall have effect for all the purposes of the Income Tax Acts (including any further application of this section where the second of any two years of assessment is the first of a subsequent pair) except that—

(a) subsection (2) above shall not prevent a person obtaining relief under those Acts for a loss sustained by him in any year of assessment;

(b) any adjustment under this section shall be disregarded for the purposes of section 63(1)(b); and

(c) where, after a claim has been made under this section in respect of the profits for any two years of assessment, the profits for both or either of those years are adjusted for any other reason, this section shall have effect as if the claim had not been made but without prejudice to the making of a further claim in respect of those profits as so adjusted.

(6) This section applies to the profits of a trade carried on by a person in partnership as it applies to the profits of a sole trader F2 . . . .

(7) In this section references to profits from a trade for a year of assessment are references to the [F3 profits] from that trade which are chargeable to income tax for that year before—

(a) any deduction for losses sustained in any year of assessment;

(b) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) any deduction for relief under Schedule 9 to the Finance Act 1981 (stock relief).

(8) Any claim under this section shall be made by notice given to the inspector not later than [F5 twelve months from the 31st January next following] the second of the years of assessment to which the claim relates but any such further claim as is mentioned in subsection (5)(c) above shall not be out of time if made [F6 before the 31st January next following] the year of assessment following that in which the adjustment is made.

[F7 (9) Where a person makes a claim under this section, any claim by him for relief under any other provision of the Income Tax Acts for either of the two years of assessment—

(a) shall not be out of time if made before the end of the period during which the claim under this section is capable of being revoked; and

(b) if already made, may be amended or revoked before the end of that period;

and, in relation to a claim made by being included in a return, any reference in this subsection to amending or revoking the claim is a reference to amending the return by amending or, as the case may be, omitting the claim.]

(10) There shall be made all such alterations of assessments or repayments of tax (whether in respect of such profits as are mentioned in subsection (1) above or of other income of the person concerned) as may be required in consequence of any adjustment under this section.

(11) Nothing in this section shall be construed as applying to profits chargeable to corporation tax F8 . . .

(12) This section applies where the first of the two years mentioned in subsection (1) above is the year 1987-88 or a subsequent year of assessment.

Textual Amendments

F2 Words in s. 96(6) repealed (with effect in accordance with ss. 215(4)(5), 216(5) of the repealing Act) by Finance Act 1994 (c. 9), s. 216(3)(a), Sch. 26 Pt. 5(24), Note 2 (with Sch. 20) (as s. 215(5) of that Act is modified (1.5.1995) by 1995 c. 4, s. 125(1))

F3 Words in s. 96(7) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F4 S. 96(7)(b) repealed (with effect in accordance with s. 214(7) of the repealing Act) by Finance Act 1994 (c. 9), s. 214(1)(a), Sch. 26 Pt. 5(24), Note 3 (with Sch. 20)

F5 Words in s. 96(8) substituted (with effect in accordance with s. 199(2), Sch. 19 para. 37(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 19 para. 37(1)(a)

F6 Words in s. 96(8) substituted (with effect in accordance with s. 199(2), Sch. 19 para. 37(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 19 para. 37(1)(b)

F7 S. 96(9) substituted (with effect in accordance with s. 128(11) of the amending Act) by Finance Act 1996 (c. 8), s. 128(3)

F8 Words in s. 96(11) repealed (with effect in accordance with s. 38(2)(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. 3(4), Note

Modifications etc. (not altering text)

C1 S. 96(8) modified for the year of assessment 1988-89 by S.I. 1991/851, regs. 1(1), 9, Sch.2.

S. 96(8) modified for the year of assessment 1989-90 by S.I. 1992/511, regs. 1(1), 9, Sch.2.

S. 96(8) applied (with modifications) for the year of assessment 1990-91 by S.I. 1993/415, regs. 1(1), 9, Sch.2

C2 S. 96(8) modified (5.4.1994 with effect in accordance with reg. 1 of the modifying S.I.) by The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728) {reg. 9}, Sch. 2

C3 S. 96(8) modified (9.3.1995 with effect in accordance with regs. 14(2), 15(2) of the modifying S.I.) by The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352), regs. 14(1), 15(1), Sch.

Marginal Citations

M1 SOURCE-1978 s. 28; 1981 s. 35(4)

97 Treatment of farm animals etc. U.K.

M2 Schedule 5 shall have effect with respect to the treatment, in computing [F9 profits] for the purposes of Case I of Schedule D, of animals and other living creatures kept for the purposes of farming or any other trade.

Textual Amendments

F9 Words in s. 97 substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

Marginal Citations

M2 SOURCE-1970 s. 139

[F10 98 Tied premises: receipts and expenses treated as those of trade. U.K.

(1) This section applies where a person (“the trader")—

(a) carries on a trade,

(b) in the course of the trade supplies, or is concerned in the supply of, goods sold or used on premises occupied by another person,

(c) has an estate or interest in those premises, and

(d) deals with that estate or interest as property employed for the purposes of the trade.

(2) Where this section applies the receipts and expenses in connection with the premises that would otherwise fall to be brought into account in computing the profits of a Schedule A business carried on by the trader shall instead be brought into account in computing the profits of the trade.

(3) Any necessary apportionment shall be made on a just and reasonable basis of receipts or expenses—

(a) which do not relate only to the premises concerned, or

(b) where the conditions in subsection (1) are met only in relation to part of the premises.

(4) This section applies to premises outside the United Kingdom as if the premises were in the United Kingdom.]

Textual Amendments

F10 S. 98 substituted (17.3.1998) by Finance Act 1998 (c. 36), s. 41(1)(3) (with s. 41(4)-(7))

99 Dealers in land. U.K.

(1) M3 In computing for tax purposes the [F11 profits] of a trade of dealing in land, there shall be disregarded—

(a) so much of the cost of woodlands in the United Kingdom purchased in the course of the trade as is attributable to trees or saleable underwood growing on the land; and

(b) where any amount has been disregarded under paragraph (a) above and, on a subsequent sale of the woodlands in the course of the trade, all or any of the trees or underwood to which the amount disregarded was attributable are still growing on the land, so much of the price for the land as is equal to the amount so disregarded in respect of those trees or underwood.

(2) M4 In computing the [F11 profits] of a trade of dealing in land, any trading receipt falling within subsection (1), (4) or (5) of section 34 or section 35 or 36 shall be treated as reduced by the amount on which tax is chargeable by virtue of that section.

(3) Where, on a claim being made under subsection (2)(b) of section 36, the amount on which tax was chargeable by virtue of that section is treated as reduced, subsection (2) above shall be deemed to have applied to the amount as reduced, and any such adjustment of liability to tax shall be made (for all relevant chargeable periods) whether by means of an assessment or otherwise, as may be necessary, and may be so made at any time at which it could be made if it related only to tax for the chargeable period in which that claim is made.

(4) M5 Subsection (1) above shall not apply where the purchase mentioned in paragraph (a) of that subsection was made under a contract entered into before 1st May 1963.

Textual Amendments

F11 Words in s. 99(1)(2) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

Marginal Citations

M3 SOURCE-1970 s. 142(1)

M4 SOURCE-1970 s. 142(2), (4)

M5 SOURCE-1970 s. 142(2), (4)