Income Tax Act 2007

74 (1) Amend section 397 (restriction of relief in case of farming and market gardening) as follows.

(2) Omit subsection (1).

(3) In subsection (3)—

(a) for “Subsections (1) and (2) above” substitute “This section”, and

(b) for “he” substitute “that farmer or market gardener”.

(4) In subsection (4) for “Subsections (1) and (2) above” substitute “This section”.

(5) In subsection (5)—

(a) omit the definition of “chargeable period”,

(b) for the definition of “prior five years” substitute—

““prior five years” means, in relation to a loss incurred in a company’s accounting period, the last five years before the beginning of that period;”,

(c) in the definition of “prior period of loss”—

(i) omit “years of assessment or”, and

(ii) for “in applying this definition to a chargeable period of a company” substitute “for this purpose”, and

(d) for the definitions of “farming” and “market gardening” substitute—

““farming” and “market gardening” shall be construed in accordance with the definitions in section 832, but as if those definitions were not restricted to activities in the United Kingdom.”

(6) In subsection (7)—

(a) omit “the calculation of the profits of a trade in Part 2 of ITTOIA 2005 or to”,

(b) after “Schedule D” insert “(or to the calculation of the profits of a trade in Part 2 of ITTOIA 2005)”, and

(c) omit “, in relation to a chargeable period of a company,”.

(7) In subsection (8)—

(a) for “Subsections (1) and (2) above” substitute “This section”, and

(b) for “Tax Acts” substitute “Corporation Tax Acts”.

(8) In subsection (10)—

(a) omit “from income tax or from corporation tax”, and

(b) for the words from “some of which are incurred” to “chargeable periods” substitute “(computed without regard to capital allowances) some of which are incurred in an accounting period wholly or partly comprised in the prior five years and some of which are incurred in a year of assessment wholly or partly comprised in the prior five years”.