Income and Corporation Taxes Act 1988

118 Restriction on relief: companies. U.K.

(1) M1 An amount which may be given F1 . . . under section 338, [F2 393A(1)] or [F3 403] below F4 . . . —

(a) in respect of a loss incurred by a company in a trade, or of charges paid by a company in connection with the carrying on of a trade, in a relevant accounting period; F5 . . .

(b) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

may be given F1 . . . to that company (“the partner company”) otherwise than against [F6 profits] arising from the trade, or to another company, only to the extent that the amount given F1 . . . or (as the case may be) the aggregate amount does not exceed the relevant sum.

(2) M2 In this section—

• “relevant accounting period” means an accounting period of the partner company at any time during which it carried on the trade as a limited partner (within the meaning of section 117(2));

• “the aggregate amount” means the aggregate of any amounts given F7 . . . to the partner company or another company at any time under section 338, [F8 393A(1)] or [F3 403] below F9 . . . —

  (a)

  in respect of a loss incurred by the partner company in the trade, or of charges paid by it in connection with carrying it on, in any relevant accounting period; F10 . . .

  (b)

  F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “the relevant sum” means the amount of the partner company’s contribution (within the meaning of section 117(3)) to the trade as at the appropriate time; and

• “the appropriate time” is the end of the relevant accounting period in which the loss is incurred or the charges paid or for which the allowance falls to be made (except that where the partner company ceased to carry on the trade during that accounting period it is the time when it so ceased).

Textual Amendments

F1 Words in s. 118(1) repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(1)(a), Sch. 4

F2 Words in s. 118(1) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 73(3)-(5), Sch. 15 para. 4(a)(in relation to losses incurred in accounting periods ending on or after 1.4.1991)

F3 Words in s. 118(1)(2) substituted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 5 para. 35

F4 Words in s. 118(1) repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(1)(b), Sch. 4

F5 S. 118(1)(b) and preceding word repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(1)(c), Sch. 4

F6 Words in s. 118(1) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F7 Words in s. 118(2) repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(2)(a) {Sch. 4} (with Sch. 2 para. 23(3))

F8 Words in s. 118(2) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 73(3)-(5), Sch. 15 para. 4(b)(in relation to losses incurred in accounting periods ending on or after 1.4.1991)

F9 Words in s. 118(2)(b) repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(2)(b), Sch. 4 (with Sch. 2 para. 23(3))

F10 S. 118(2)(b) and preceding word repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 23(2)(c), Sch. 4 (with Sch. 2 para. 23(3))

Marginal Citations

M1 Source—1985 Sch.12 3(1)-(3)

M2 Source—1985 Sch.12 3(4), 1, 4