Income Tax Act 2007 section 25

Reliefs and allowances deductible at Steps 2 and 3: supplementary

Section 25 provides supplementary rules on how reliefs and allowances should be deducted at Steps 2 and 3 of the income tax calculation set out in section 23, including the order of deduction and the requirement that deductions cannot exceed available income.

• Reliefs and allowances must be deducted in the way that produces the greatest possible reduction in income tax liability.
• This general rule is overridden by numerous specific provisions that restrict certain reliefs to particular types of income or require a particular order of deduction.
• A relief or allowance can only be deducted to the extent that there is sufficient income remaining after earlier deductions have been taken into account.
• No relief or allowance may be deducted more than once.