Section 29 Tax reductions: supplementary
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(1) This section supplements the provisions about tax reductions in Step 6 of the calculation in section 23.
(2) A tax reduction may be deducted at Step 6 only so far as there is sufficient tax calculated at Step 5 of the calculation from which to deduct it.
(3) In deciding whether there is sufficient tax calculated at Step 5 from which to deduct a tax reduction, tax reductions already deducted at Step 6 must be taken into account.
(4) Subsections (2) and (3) apply in addition to—
(a) [section 796(1), (2) and (3) of ICTA]1 (limits on credit for foreign tax), and
(b) any other provision of the Income Tax Acts that limits the amount of a tax reduction.
Amendments
1 Substituted by S.I. 2009/2859 article 4(2)(a) with (retrospective) effect for 2007-08 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending after 5th April 2007 (for corporation tax purposes).
(4A) If the taxpayer is an individual, the total of the tax reductions within subsection (4B) that are deducted at Step 6 must not be greater than—
A - B
where—
A is the amount of tax calculated at Step 5, and
B is the total amount of the tax treated under section 414 (gift aid) as deducted from gifts made by the taxpayer in the tax year.
Amendments
Subs (4A) inserted by S.I. 2009/2859 article 4(1)(b) with (retrospective) effect for 2007-08 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending after 5th April 2007 (for corporation tax purposes).
(4B) A tax reduction is within this subsection if it is under—
Chapter 1 of Part 5 (EIS relief),
Chapter 2 of Part 6 (VCT relief), or
Chapter 1 of Part 7 (community investment tax relief).
Amendments
Subs (4B) inserted by S.I. 2009/2859 article 4(1)(b) with (retrospective) effect for 2007-08 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending after 5th April 2007 (for corporation tax purposes).
(4C) Subsection (4A) applies in addition to subsections (2) and (3).
Amendments
Subs (4C) inserted by S.I. 2009/2859 article 4(1)(b) with (retrospective) effect for 2007-08 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending after 5th April 2007 (for corporation tax purposes).
(5) For the purposes of this Chapter, a person is treated as being entitled to a tax reduction under section 788 of ICTA if the person is entitled to credit against income tax under double taxation arrangements.
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