Income Tax (Trading and Other Income) Act 2005 section 191

Withdrawal of relief

Section 191 deals with the circumstances in which relief previously given for unremittable amounts is clawed back, and how that clawback operates in practice.

• Relief previously given under section 189 for unremittable amounts must be withdrawn when certain trigger events occur, such as the amount ceasing to be unremittable, being used abroad, or being exchanged for a remittable amount.
• Relief is also withdrawn where a bad debt deduction is allowed for the amount, or where an insurance payment is received in respect of an unremittable debt.
• The clawback works by treating the relevant amount as a trading receipt in the period of account in which the trigger event occurs, but only to the extent relief was originally given and has not already been clawed back.
• Where the trigger event is an insurance recovery, the amount brought back into account as a receipt is capped at the amount of the insurance payment actually received.