Income Tax Act 2007 section 122

Meaning of "the applicable amount of the loss"

Section 122 defines "the applicable amount of the loss" for the purposes of claiming property loss relief against general income, restricting the relief to the lesser of the actual loss and any amount arising from a relevant connection to capital allowances or agriculture.

• The applicable amount of the loss is the lower of the total loss itself and the amount arising from a relevant connection (capital allowances or agricultural expenses).
• Where a loss has a capital allowances connection but no agricultural connection, the relevant amount is the net capital allowances — the excess of capital allowances over charges under the Capital Allowances Act 2001.
• Where the business has an agricultural connection but no capital allowances connection, the relevant amount is the total of allowable agricultural expenses.
• Where both a capital allowances connection and an agricultural connection exist, the relevant amount is the sum of the net capital allowances and the allowable agricultural expenses.