Change 1 Article Choose an article Title and introductory text 1 Overview of Act 2 Overview of priority rules 3 Overview of Part 2 4 Provisions which must be given priority over Part 2 5 Charge to tax on trade profits 6 Territorial scope of charge to tax 6A Arrangements for avoiding tax 6B Trade of dealing in or developing UK land 7 Income charged 7A Apportionment etc of profits to tax year 7B Rule if trader starts to carry on trade after 31 March 7C Rule if there is a late accounting date 7D Election to disapply late accounting date rules 8 Person liable 9 Farming and market gardening 10 Commercial occupation of land other than woodlands 11 Commercial occupation of woodlands 12 Profits of mines, quarries and other concerns 13 Visiting performers 14 Visiting performers: supplementary 15 Divers and diving supervisors 16 Oil extraction and related activities 16A Voluntary office-holders: compensation for lost profits 16B Payments to company directors 16C Professionals in practice: incidental income from an office or employment 17 Effect of becoming or ceasing to be a UK resident 18 Effect of company starting or ceasing to be within charge to income tax 19 Tied premises 20 Caravan sites where trade carried on 21 Surplus business accommodation 22 Payments for wayleaves 22A Trading allowance 23 Rent-a-room and qualifying care relief 23A Application of section 23E: conditions 23B Meaning of “relevant benefit” 23C Meaning of “qualifying third party payment” 23D Other definitions 23E Tax treatment of relevant benefits 23F Relevant benefits: persons other than T 23G Anti-avoidance 23H Double taxation 23I Tax treatment of carried interest 23J Election to disapply section 23I 23K Location of trade treated as carried on under section 23I etc 23L Carried interest arising where individual deceased 23M Temporary non-UK residents: tax treatment of accrued carried interest gains 23N Permitted deduction etc 23P Carried interest: anti-avoidance 23Q Carried interest: avoidance of double taxation 23R Definitions 24 Professions and vocations 24A Cash basis to apply by default 25 Generally accepted accounting practice 25A Cash basis for small businesses 25B Excluded trades 25C Election for profits to be calculated in accordance with GAAP 26 Losses calculated on same basis as profits 27 Receipts and expenses 28 Items treated under CAA 2001 as receipts and expenses 28A Money's worth 29 Interest 30 Animals kept for trade purposes 31 Relationship between rules prohibiting and allowing deductions 31A Conditions to be met for profits to be calculated on cash basis 31B Relevant maximum 31C Excluded persons 31D Effect of election under section 25A 31E Calculation of profits on cash basis 31F Overview of rest of Part 2 as it applies to cash basis 32 Professions and vocations 32A Application of Chapter to the cash basis 33 Capital expenditure 33A Cash basis: capital expenditure 34 Expenses not wholly and exclusively for trade and unconnected losses 35 Bad and doubtful debts 36 Unpaid remuneration 37 Unpaid remuneration: supplementary 38 Restriction of deductions 39 Making of “employee benefit contributions” 40 Provision of qualifying benefits 41 Timing and amount of certain qualifying benefits 42 Provision or payment out of employee benefit contributions 43 Profits calculated before end of 9 month period 44 Interpretation of sections 38 to 44 45 Business entertainment and gifts: general rule 46 Business entertainment: exceptions 47 Business gifts: exceptions 48 Car ... hire 49 Car ... hire: supplementary 50 Hiring cars (but not motor cycles) with low carbon dioxide emissions 50A Short-term hiring in and long-term hiring out 50B Connected persons: application of section 48 51 Patent royalties 51A Cash basis: interest payments on loans 52 Exclusion of double relief for interest 53 Social security contributions 54 Penalties , interest and VAT surcharges and interest 55 Crime-related payments 55A Expenditure on integral features 55B Rental rebates 56 Professions and vocations 56A Application of Chapter to the cash basis 57 Pre-trading expenses 57A Expenses incurred by traders on food and drink 57B Cash basis: interest payments on loans 58 Incidental costs of obtaining finance 59 Convertible loans and loan stock etc. 60 Tenants under taxed leases: introduction 61 Tenants occupying land for purposes of trade treated as incurring expenses 62 Limit on deductions if tenant entitled to mineral extraction allowance 63 Tenants dealing with land as property employed for purposes of trade 64 Restrictions on section 61 expenses: lease premium receipts 65 Restrictions on section 61 expenses: lease of part of premises 66 Corporation tax receipts under ICTA treated as taxed receipts 67 Restrictions on section 61 expenses: corporation tax receipts under ICTA 68 Replacement and alteration of trade tools 69 Payments for restrictive undertakings 70 Employees seconded to charities and educational establishments 71 Educational establishments 72 Payroll deduction schemes: contributions to agents' expenses 73 Counselling and other outplacement services 74 Retraining courses 75 Retraining courses: recovery of tax 76 Redundancy payments and approved contractual payments 77 Payments in respect of employment wholly in employer's trade 78 Payments in respect of employment in more than one capacity 79 Additional payments 79A Additional payments: change in the persons carrying on the trade 80 Payments made by the Government 81 Personal security expenses 82 Contributions to local enterprise organisations or urban regeneration companies 83 Meaning of “local enterprise organisation” 84 Approval of local enterprise agencies 85 Supplementary provisions with respect to approvals 86 Meaning of “urban regeneration company” 86A Contributions to flood and coastal erosion risk management projects 86B Interpretation of section 86A 87 Expenses of research and development 88 Payments to research associations, universities etc. 89 Expenses connected with patents 90 Expenses connected with designs or trade marks 91 Payments to Export Credits Guarantee Department 92 Expenses connected with foreign trades 93 Allocation of expenses 94 Family expenses 94A Costs of setting up SAYE option scheme or CSOP scheme 94AA Deductions in relation to salaried members 94B Professions and vocations 94C Provisions not applicable to certain firms 94D Expenditure on vehicles 94E Excluded vehicles 94F The appropriate mileage amount 94G Definitions of types of vehicle 94H Use of home for business purposes 94I Premises used both as a home and as business premises 95 Professions and vocations 95A Application of Chapter to the cash basis 96 Capital receipts 96A Capital receipts under, or after leaving, cash basis 96B Section 96A: supplementary provision 97 Debts incurred and later released 97A Cash basis: value of trading stock on cessation of trade 97B Cash basis: value of work in progress on cessation of profession or vocation 98 Acquisition of trade: receipts from transferor's trade 99 Reverse premiums 100 Excluded cases 101 Tax treatment of reverse premiums 102 Arrangements not at arm's length 103 Connected persons and property arrangements 104 Distribution of assets of mutual concerns 105 Industrial development grants 106 Sums recovered under insurance policies etc. 106A Professions and vocations 106B Application of Chapter 106C Amounts not reflecting commercial transactions 106D Capital receipts 106E Gifts to charities etc 107 Professions and vocations 108 Gifts of trading stock to charities etc. 109 Receipt by donor or connected person of benefit attributable to certain gifts 110 Meaning of “designated educational establishment” 111 Election for application of herd basis rules 111A Herd basis rules not to apply where cash basis used 112 Meaning of “animal”, “herd”, “production herd” etc. 113 Other interpretative provisions 114 Initial cost of herd and value of herd 115 Addition of animals to herd 116 Replacement of animals in herd 117 Amount of receipt if old animal slaughtered under disease control order 118 Sale of animals from herd 119 Sale of whole or substantial part of herd 120 Acquisition of new herd begun within 5 years of sale 121 Section 120: sale for reasons outside farmer's control 122 Replacement of part sold begun within 5 years of sale 123 Section 122: sale for reasons outside farmer's control 124 Herd basis elections 125 Five year gap in which no production herd kept 126 Slaughter under disease control order 127 Preventing abuse of the herd basis rules 128 Information if election made 129 Further assessment etc. if herd basis rules apply 130 Expenditure to which this Chapter applies 130A Chapter not to apply where cash basis used 131 Meaning of “film” and related expressions 132 Meaning of “original master version” and “certified master version” 133 Meaning of “relevant period” 134 Expenditure treated as revenue in nature 135 Allocation of production or acquisition expenditure to relevant periods 136 Application of provisions about certified master versions 137 Certified master versions: preliminary expenditure 138 Certified master versions: production expenditure 138A Certified master versions: acquisition expenditure 139 Certified master versions: production expenditure on limited-budget films 140 Certified master versions: acquisition expenditure on limited-budget films 140A “Disqualifying deduction” 141 “Total production expenditure in respect of the original master version” 142 When expenditure is incurred 142A Deferred income agreements which exist when deduction made 142B Meaning of “deferred income agreement in respect of a film” 142C Deferred income agreements entered into after deduction made 142D Meaning of the “net excess relief” 142E Sections 142A to 142D: time of entry into an agreement 143 Election for sections 134 to 140 not to apply 144 Meaning of “genuinely intended for theatrical release” 144A Chapter not to apply where cash basis used 145 Professions and vocations 146 Meaning of “relevant telecommunication right” 147 Expenditure and receipts treated as revenue in nature 148 Credits or debits arising from revaluation 148ZA Chapter not to apply where cash basis used 148A Lessor under long funding finance lease: rental earnings 148B Lessor under long funding finance lease: exceptional items 148C Lessor under long funding finance lease making termination payment 148D Lessor under long funding operating lease: periodic deduction 148DA “Starting value”: general 148DB “Starting value” where plant or machinery originally unqualifying 148E Long funding operating lease: lessor's additional expenditure 148EA Determination of remaining residual value resulting from lessor's first additional expenditure 148EB Determination of remaining residual value resulting from lessor's further additional expenditure 148F Lessor under long funding operating lease: termination of lease 148FA Cases where ss. 148A to 148F do not apply: plant or machinery held as trading stock 148FB Cases where ss. 148A to 148F do not apply: lessor also lessee under non-long funding lease 148FC Cases where ss. 148A to 148F do not apply: other avoidance 148FD Cases where ss 148A to 148F do not apply: films 148G Lessee under long funding finance lease: limit on deductions 148GA Lessee under long funding finance leases: right-of-use leases 148H Lessee under long funding finance lease: termination 148I Lessee under long funding operating lease 148J Interpretation of Chapter 10A 148K Application of Chapter to the cash basis 149 Taxation of amounts taken to reserves 150 Conversion etc. of securities held as circulating capital 151 Exchanges of gilts for gilt strips 152 Consolidation of gilt strips 153 Meaning of “gilt-edged security” and “strip” 154 Regulations for determining market value of securities or strips 154A Certain non-UK residents with interest on 3½% War Loan 1952 Or After 155 Levies and repayments under FISMA 2000 156 Purchase or sale of woodlands 157 Relief in respect of mineral royalties 158 Lease premiums etc: reduction of receipts 159 Ministers of religion 160 Alternative basis of calculation in early years of practice 161 Mineral exploration and access 162 Payments by persons liable to pool betting duty 163 Deduction for deemed employment payment 164 Special rules for partnerships 164A Deduction for deemed employment payments 164B Intermediaries providing worker's services to public sector 165 Deduction for site preparation expenditure 166 Allocation of site preparation expenditure 167 Site preparation expenditure: supplementary 168 Site restoration payments 169 Cemeteries and crematoria: interests in land 170 Deduction for capital expenditure 171 Allocation of ancillary capital expenditure 172 Exclusion of expenditure met by subsidies 172ZA Niches, memorials and inscriptions: introduction 172ZB Allowable deductions: niches 172ZC Allowable deductions: memorials 172ZD Allowable deductions: inscriptions 172ZE Costs of the building 172A Meaning of “trading stock” 172AA Chapter not to apply where cash basis used 172B Trading stock appropriated by trader 172C Trading stock supplied by trader 172D Disposals not made in the course of trade 172E Acquisitions not made in the course of trade 172F Transfer pricing rules to take precedence 173 Valuation of trading stock on cessation 174 Meaning of “trading stock” 175 Basis of valuation of trading stock 176 Sale basis of valuation: sale to unconnected person 177 Sale basis of valuation: sale to connected person 178 Sale basis of valuation: election by connected persons 179 Connected persons 180 Cost to buyer of stock valued on sale basis of valuation 181 Meaning of “sale” and related expressions 182 Valuation of work in progress on cessation 183 Meaning of “work in progress” 184 Basis of valuation of work in progress 185 Election for valuation at cost 186 Determination of questions ... 187 Professions and vocations 188 Application of Chapter 188A Chapter not to apply where cash basis used 189 Relief for unremittable amounts 190 Restrictions on relief 191 Withdrawal of relief 191A Chapter not to apply where cash basis used 192 Meaning of “know-how” etc. 193 Disposal of know-how if trade continues to be carried on 194 Disposal of know-how as part of disposal of all or part of a trade 195 Seller controlled by buyer etc. 196 Professions and vocations 197 Meaning of “accounting date” 198 General rule 199 First tax year 200 Second tax year 201 Tax year in which there is no accounting date 202 Final tax year 203 Apportionment etc. of profits to basis periods 204 Meaning of “overlap period” and “overlap profit” 204A Overlap profit and trading allowance under Chapter 1 of Part 6A 205 Deduction for overlap profit in final tax year 206 Restriction on bringing losses into account twice 207 Treatment of business start-up payments received in an overlap period 208 When the late accounting date rules apply 209 Rule if there is an accounting date 210 Rules if there is no accounting date 211 Treating middle date as accounting date 212 Consequence of treating middle date as accounting date 213 Circumstances in which middle date not treated as accounting date 214 When a change of accounting date occurs 215 Change of accounting date in third tax year 216 Change of accounting date in later tax year 217 Conditions for basis period to end with new accounting date 218 Commercial reasons for change of accounting date 219 The year after an ineffective change of accounting date 220 Deduction for overlap profit on change of accounting date 221 Claim for averaging of fluctuating profits 221A Claim not available where cash basis used 222 Circumstances in which claim for two-year averaging may be made 222A Circumstances in which claim for five-year averaging may be made 223 Adjustment of profits 224 Effect of adjustment 225 Effect of later adjustment of profits 225ZA Application of Chapter 16ZA 225ZAA Chapter not to apply where cash basis used 225ZB Right to make claim 225ZC Book value 225ZD Effect of claim for spreading profits 225ZE Adjustment: cessation of trading 225ZF Time limits etc for spreading claim 225ZG Interpretation 225ZH Chapter not to apply where cash basis used 225A Meaning of “oil extraction activities” 225B Meaning of “oil rights” 225C Meaning of “ring fence income” 225D Meaning of “ring fence trade” 225E Other definitions 225F Valuation where market value taken into account under section 2 of OTA 1975 225G Valuation where disposal not sale at arm's length 225H Valuation where excess of nominated proceeds 225I Valuation where relevant appropriation but no disposal 225J Valuation where appropriation to refining etc 225K Reduction of expenditure by reference to regional development grant 225L Adjustment as a result of regional development grant 225M Tariff receipts etc 225N Expenditure on abandonment guarantees 225O Relief for reimbursement expenditure under abandonment guarantees 225P Payment under abandonment guarantee not immediately applied 225Q Amounts excluded from section 225O(1) 225R Introduction to section 225S 225S Relief for expenditure incurred by a participator in meeting defaulter's abandonment expenditure 225T Reimbursement by defaulter in respect of certain abandonment expenditure 225U Interest on repayment of APRT 225V Receipts arising from decommissioning 226 Professions and vocations 227 Application of Chapter 227A Application of Chapter where cash basis used 227B Cash basis treatment: full relief under Chapter 1 of Part 6A (trading allowance) 227C Application of Chapter where section 227B applies 228 Adjustment income and adjustment expense 229 Income charged 230 Person liable 231 Calculation of the adjustment 232 Treatment of adjustment income 233 Treatment of adjustment expense 234 No adjustment for certain expenses previously brought into account 235 Cases where adjustment not required until assets realised or written off 236 Change from realisation basis to mark to market 237 Election for spreading if section 236 applies 238 Spreading on ending of exemption for barristers and advocates 239 Election to accelerate charge under section 238 239A Spreading on leaving cash basis 239B Election to accelerate charge under section 239A 240 Liability of personal representatives if person liable dies 240A Professions and vocations 240B “Entering the cash basis” 240C Unrelieved qualifying expenditure: Parts 2, 7 and 8 of CAA 2001 240CA Unrelieved qualifying expenditure: Part 5 of CAA 2001 240D Assets not fully paid for 240E Effect of election where predecessor and successor are connected persons 241 Professions and vocations 242 Charge to tax on post-cessation receipts 243 Extent of charge to tax 244 Income charged 245 Person liable 246 Basic meaning of “post-cessation receipt” 247 Other rules about what counts as post-cessation receipts 248 Debts paid after cessation 249 Debts released after cessation 250 Receipts relating to post-cessation expenditure 251 Transfer of rights if transferee does not carry on trade 252 Transfer of trading stock or work in progress 253 Lump sums paid to personal representatives for copyright etc. 254 Allowable deductions 255 Further rules about allowable deductions 256 Treatment of post-cessation receipts 257 Election to carry back 258 Changes in trustees and personal representatives 259 Meaning of “statutory insolvency arrangement” 260 Overview of Part 3 261 Provisions which must be given priority over Part 3 262 Priority between Chapters within Part 3 263 Introduction 264 UK property business 265 Overseas property business 266 Meaning of “generating income from land” 267 Activities not for generating income from land 268 Charge to tax on profits of a property business 269 Territorial scope of charge to tax 270 Income charged 271 Person liable 271A Basis of calculation of profits: GAAP required 271B Calculation of profits in accordance with GAAP 271C Basis of calculation of profits: cash basis required 271D Calculation of profits on the cash basis 271E Profits of a property business: application of trading income rules 272 Application of trading income rules: GAAP 272ZA Application of trading income rules: cash basis 272A Restricting deductions for finance costs related to residential property 272B Meaning of “costs of a dwelling-related loan” 273 Amounts not brought into account as part of a property business 274 Relationship between rules prohibiting and allowing deductions 274A Reduction for individuals: entitlement 274AA Reduction for individuals: calculation 274B Reduction for accumulated or discretionary trust income: entitlement 274C Reduction for accumulated or discretionary trust income: calculation 275 Apportionment etc. of profits to tax year 275A Rule if person starts to carry on business after 31 March 275B Rule if there is a late accounting date 275C Election to disapply late accounting date rules 276 Introduction 276A Application of Chapter to property businesses using cash basis 277 Lease premiums 278 Amount treated as lease premium where work required 279 Sums payable instead of rent 280 Sums payable for surrender of lease 281 Sums payable for variation or waiver of terms of lease 281A Sums to which sections 277 to 281 do not apply 282 Assignments for profit of lease granted at undervalue 283 Provisions supplementary to section 282 284 Sales with right to reconveyance 285 Sale and leaseback transactions 286 Provisions supplementary to sections 284 and 285 287 Circumstances in which additional calculation rule applies 288 The additional calculation rule 289 The additional calculation rule: special cases 290 Meaning of “unused amount” and “unreduced amount” 291 Deductions for expenses under section 292 292 Tenants under taxed leases treated as incurring expenses 293 Restrictions on section 292 expenses: the additional calculation rule 294 Restrictions on section 292 expenses: lease of part of premises 295 Limit on reductions and deductions 296 Corporation tax receipts treated as taxed receipts 297 Taking account of reductions in corporation tax receipts 298 Taking account of deductions for rent as a result of section 37(4) or 87(2) of ICTA 299 Payment of tax by instalments 300 Statement of accuracy for purposes of section 282 301 Claim for repayment of tax payable by virtue of section 284 302 Claim for repayment of tax payable by virtue of section 285 302A Appeals against proposed determinations 302B Section 302A: supplementary 302C Determination by tribunal 303 Rules for determining effective duration of lease 304 Applying the rules in section 303 305 Information about effective duration of lease 306 Provisions about premiums 307 Interpretation 307A Cash basis: application of Chapter 307B Cash basis: capital expenditure 307C Cash basis: deduction for costs of loans 307D Cash basis: modification of deduction for costs of loans 307E Capital receipts under, or after leaving, cash basis 307F Deemed capital receipts under, or after leaving, cash basis 307G Property allowance 308 Furnished lettings section-308A section-308B section-308C 309 Rent-a-room relief 310 Acquisition of business: receipts from transferor's UK property business 311 Reverse premiums 311A Replacement domestic items relief 312 Deduction for expenditure on energy-saving items 313 Restrictions on relief 314 Regulations 315 Deduction for expenditure on sea walls 316 Transfer of interest in premises 317 Ending of lease of premises 318 Transfer involving company within the charge to corporation tax 319 Relief in respect of mineral royalties 320 Nature of item apportioned on sale of estate or interest in land 321 Mutual business 329 Application of Chapter 329A Application of Chapter where cash basis used 330 Adjustment income and adjustment expense 331 Income charged 332 Person liable 333 Treatment of adjustment income 334 Treatment of adjustment expense 334A Spreading on leaving cash basis and related election 334B “Entering the cash basis” 334C Unrelieved qualifying expenditure 334D Assets not fully paid for 334E Effect of election where predecessor and successor are connected persons 335 Charge to tax on rent receivable in connection with a UK section 12(4) concern 336 Meaning of “rent receivable in connection with a UK section 12(4) concern” 337 Income charged 338 Person liable 339 Deduction for management expenses of owner of mineral rights 340 Relief in respect of mineral royalties 341 Meaning of “mineral lease or agreement” and “mineral royalties” 342 Extended meaning of “mineral royalties” etc. in Northern Ireland 343 Power of Commissioners to determine what counts as “mineral royalties” 344 Charge to tax on rent receivable for a UK electric-line wayleave 345 Meaning of “rent receivable for a UK electric-line wayleave” 346 Extent of charge to tax 347 Income charged 348 Person liable 349 Charge to tax on post-cessation receipts 350 Extent of charge to tax 351 Income charged 352 Person liable 353 Basic meaning of “post-cessation receipt” 354 Other rules about what counts as a “post-cessation receipt” 355 Transfer of rights if transferee does not carry on UK property business 356 Application to businesses within the charge to corporation tax 357 Charge to tax on overseas property income 358 Meaning of “overseas property income” 359 Income charged 360 Person liable 361 Changes in trustees and personal representatives 362 Effect of company starting or ceasing to be within charge to income tax 363 Overseas property businesses and overseas land: adaptation of rules 364 Meaning of “lease” and “premises” 365 Overview of Part 4 366 Provisions which must be given priority over Part 4 367 Priority between Chapters within Part 4 368 Territorial scope of Part 4 charges 368A Interpretation of special rules for temporary non-residents 369 Charge to tax on interest 370 Income charged 370A Valuation of interest not paid in cash 371 Person liable 372 Building society dividends 373 Open-ended investment company interest distributions 374 Date when interest payments under section 373 made 375 Interpretation of sections 373 and 374 376 Authorised unit trust interest distributions 377 Date when interest payments under section 376 made 378 Interpretation of sections 376 and 377 378A Offshore fund distributions 379 Payments by registered societies or certain co-operatives 380 Funding bonds 380A FSCS payments representing interest 381 Discounts 381A Charge to tax on disguised interest 381B Income charged 381C Person liable 381D Avoidance of double taxation 381E Exception for returns from certain shares 382 Contents of Chapter 383 Charge to tax on dividends and other distributions 384 Income charged 385 Person liable 385A No charge to tax on purchase by company of exempt employee shareholder shares 386 Open-ended investment company dividend distributions 387 Date when dividends paid under section 386 388 Interpretation of sections 386 and 387 389 Authorised unit trust dividend distributions 390 Date when dividends paid under section 389 391 Interpretation of sections 389 and 390 392 SIP shares: introduction 393 Later charge where cash dividends retained in SIPs are paid over 394 Distribution when dividend shares cease to be subject to SIP 395 Reduction in tax due in cases within section 394 396 Interpretation of sections 392 to 395 396A Arrangements offering a choice of capital or income return 396B Distributions in a winding up 397 Tax credits for qualifying distributions of UK resident companies: UK residents and eligible non-UK residents 397A Tax credits for distributions of non-UK resident companies: UK residents and eligible non-UK residents 397AA Tax credit under section 397A: conditions 397B Tax credits under section 397A: manufactured overseas dividends 397BA Meaning of “qualifying territory” 397C Meaning of “minority shareholder” 398 Increase in amount or value of dividends where tax credit available 399 Tax treated as paid on distributions received by non-UK resident persons 400 Non-qualifying distributions 401 Relief: distribution repaying shares or security issued in earlier distribution 401ZA Relief: distributions to trustees of employee-ownership trusts 401A Recovery of overpaid tax credit etc 401B Power to obtain information 401C Temporary non-residents 402 Charge to tax on dividends from non-UK resident companies 403 Income charged 404 Person liable 404A Distributions in a winding up 405 SIP shares: introduction 406 Later charge where cash dividends retained in SIPs are paid over 407 Dividend payment when dividend shares cease to be subject to SIP 408 Reduction in tax due in cases within section 407 408A Temporary non-residents 409 Charge to tax on stock dividend income 410 When stock dividend income arises 410A Conversion etc of bonus share capital 411 Income charged 412 Cash equivalent of share capital 413 Person liable 413A Temporary non-residents 414 Income tax treated as paid 414A Interpretation of Chapter 415 Charge to tax under Chapter 6 416 Income charged 417 Person liable 418 Relief where borrowers liable as settlors 419 Loans and advances to persons who die 420 Loans and advances to trustees of trusts that have ended 420A Temporary non-residents 421 Income tax treated as paid 421A Power to obtain information 422 Charge to tax on purchased life annuity payments 423 Meaning of “purchased life annuity” 424 Income charged 425 Person liable 426 Annuity payments received after deduction of tax 427 Charge to tax on profits from deeply discounted securities 428 Income charged 429 Person liable 430 Meaning of “deeply discounted security” 431 Excluded occasions of redemption 432 Securities which are not deeply discounted securities 433 Meaning of “excluded indexed security” 434 Securities issued in separate tranches: preliminary 435 Securities issued in separate tranches: basic rule 436 Deeply discounted securities issued in separate tranches: nominal value rule 437 Transactions which are disposals 438 Timing of transfers and acquisitions 439 Calculating the profit from disposals 440 Market value disposals 441 Market value acquisitions 442 Securities issued in accordance with qualifying earn-out right 443 Application of this Chapter to strips of government securities 444 Meaning of “strip” in Chapter 8 445 Strips of government securities: acquisitions and disposals 446 Strips of government securities: relief for losses 447 Restriction of profits on strips by reference to original acquisition cost 448 Restriction of losses on strips by reference to original acquisition cost 449 Strips of government securities: manipulation of acquisition, transfer or redemption payments 450 Market value of strips etc. 451 Market value of strips etc. quoted in foreign stock exchange lists 452 Power to modify this Chapter for strips 452A Application of this Chapter to corporate strips 452B Meaning of “interest-bearing corporate security” in Chapter 8 452C Conversion of interest-bearing corporate securities into corporate strips 452D Conversion into corporate strips: lower level conversions 452E Meaning of “corporate strip” in Chapter 8 452F Corporate strips: acquisitions and disposals 452G Corporate strips: manipulation of acquisition, transfer or redemption payments 453 Application of sections 454 to 456 454 Listed securities held since 26th March 2003: relief for losses 455 Listed securities held since 26th March 2003: calculating the profit or loss on disposals 456 Securities issued to connected persons etc. at excessive price: subsequent transfers to connected persons 457 Trustees 458 Non-UK resident trustees 459 Transfer of assets abroad 460 Minor definitions 461 Charge to tax under Chapter 9 462 When gains arise from policies and contracts 463 Income charged 463A Restricted relief qualifying policies: disapplication of section 485 etc 463B Restricted relief qualifying policies: allowable premiums 463C Restricted relief qualifying policies: personal representatives and trustees with deceased settlors 463D Restricted relief qualifying policies: assignments and events following assignments etc 463E Transitional protection for policies issued in respect of insurances made on or after 21 March 2012 but before 6 April 2013 464 Person liable for tax: introduction 465 Person liable: individuals 465A Amounts for which individuals liable to be treated as highest part of total income 465B Temporary non-residents 466 Person liable: personal representatives 467 Person liable: UK resident trustees 468 Non-UK resident trustees and foreign institutions 469 Two or more persons interested in policy or contract 470 Interests in rights under a policy or contract for section 469 471 Determination of shares etc. 472 Trusts created by two or more persons 473 Policies and contracts to which Chapter 9 applies: general 473A Connected policies or contracts treated as single policy or contract 474 Special rules: qualifying policies 475 Special rules: personal portfolio bonds 476 Special rules: foreign policies 477 Special rules: certain older policies and contracts 478 Exclusion of mortgage repayment policies 479 Exclusion of pension policies 480 Exclusion of excepted group life policies 481 Excepted group life policies: conditions about benefits 482 Excepted group life policies: conditions about persons intended to benefit 483 Exclusion of credit union group life policies 484 When chargeable events occur 485 Disregard of certain events in relation to qualifying policies 486 Exclusion of maturity of capital redemption policies in certain circumstances 487 Disregard of certain assignments 488 Disregard of some events after alterations of life insurance policy terms 489 Conditions applicable to alterations of life insurance policy terms 490 Last payment under guaranteed income bonds etc. treated as total surrender 491 Calculating gains: general rules 492 The total benefit value of a policy or contract 493 The value of a policy or contract 494 The total allowable deductions for a policy or contract 495 Disregard of certain amounts in calculating gains under section 491 496 Modification of section 494: qualifying endowment policies held as security for company debts 497 Disregard of trivial inducement benefits 498 Requirement for periodic calculations in part surrender or assignment cases 499 Meaning of “insurance year” and “final insurance year” 500 Events treated as part surrenders 501 Part surrenders: loans 502 Exception from section 501 for loans to buy life annuities 503 Exception from section 501 for certain loans under qualifying policies 504 Part surrenders: payments under guaranteed income bonds etc. 505 Assignments etc. involving co-ownership 506 Assignments occurring when there is a co-ownership transaction 507 Method for making periodic calculations under section 498 507A Recalculating gains under section 507 508 The value of rights partially surrendered or assigned 509 Chargeable events in certain cases where periodic calculations show gains 510 Requirement for transaction-related calculations in certain part surrender and assignment cases 511 Method for making transaction-related calculations under section 510 512 Available premium left for relevant transaction 512A Recalculating gains under section 511 513 Special rules for part surrenders and assignments in final insurance year 514 Chargeable events where transaction-related calculations show gains 515 Requirement for annual calculations in relation to personal portfolio bonds 9 516 Meaning of “personal portfolio bond” 517 Policies and contracts which are not personal portfolio bonds 518 The index categories 519 The index selection conditions 520 The property categories 521 The property selection conditions 522 Method for making annual calculations under section 515 523 The total amount of personal portfolio bond excesses 524 The total amount of part surrender gains 525 Chargeable events where annual calculations show gains 526 Power to make regulations about personal portfolio bonds 527 Reduction for sums taken into account otherwise than under Chapter 9 528 Reduction in amount charged on basis of non-UK residence where individual liable for tax 528A Reduction in amount charged on basis of non-UK residence of deceased person 529 Exceptions to section 528 530 Income tax treated as paid etc. 531 Exceptions to section 530 532 Relief for policies and contracts with European Economic Area insurers 533 Meaning of “comparable EEA tax charge” 534 Regulations providing for relief in other cases where foreign tax chargeable 535 Top slicing relief 536 Top slicing relieved liability: one chargeable event 537 Top slicing relieved liability: two or more chargeable events 538 Recovery of tax from trustees 539 Relief for deficiencies 540 When deficiencies arise: events following calculation events 541 Calculation of deficiencies 541A Effect of rebated or reinvested commission in certain cases 541B Section 541A: further definitions 542 Replacement of qualifying policies 543 Issue time of qualifying policy replacing foreign policy 544 Application of Chapter to policies and contracts in which companies interested 545 Minor definitions 546 Table of provisions subject to special rules for older policies and contracts ... section-548 section-549 section-550 551 Charge to tax on profits from disposal of deposit rights 552 Meaning of “deposit rights” 553 Income charged 554 Person liable 570 Charge to tax under Chapter 13 571 Meaning of “foreign holdings” etc. 572 Income charged 573 Person liable 574 Overview of Part 5 575 Provisions which must be given priority over Part 5 576 Priority between Chapters within Part 5 577 Territorial scope of Part 5 charges 577A Territorial scope of Part 5 charges: receipts from intellectual property 578 Contents of Chapter 579 Charge to tax on royalties and other income from intellectual property 580 Income charged under section 579 581 Person liable for tax under section 579 582 Deductions in calculating certain income charged under section 579 583 Charge to tax on income from disposals of know-how 584 Exceptions to charge under section 583 585 Income charged under section 583 586 Person liable for tax under section 583 587 Charge to tax on income from sales of patent rights 588 Income charged under section 587 589 Person liable for tax under section 587 590 UK resident sellers: spreading rules 591 Non-UK resident sellers: election for spreading 592 Further provision about elections for spreading: instalments 593 Death of seller 594 Winding up of a body corporate 595 Deduction of tax from payments to non-UK residents 596 Adjustments where tax has been deducted 597 Licences connected with patents 598 Rights to acquire future patent rights 599 Sums paid for Crown use etc. treated as paid under licence 600 Relief for expenses: patent income 601 How relief is given under section 600 602 Payments received after deduction of tax 603 Contributions to expenditure 604 Contributions not made by public bodies nor eligible for tax relief 605 Exchanges 606 Apportionment where property sold together 607 Questions about apportionments affecting two or more persons 608 Meaning of “capital sums” etc. 609 Charge to tax on films and sound recordings businesses 610 Income charged 611 Person liable 612 Calculation of income 613 Application of trading income rules to non-trade businesses 614 Charge to tax on certain telecommunication rights of a non-trader 615 Income charged 616 Person liable 617 Deductions in calculating certain income charged 618 Payments received after deduction of tax 619 Charge to tax under Chapter 5 619A Income treated as highest part of settlor's total income 620 Meaning of “settlement” and “settlor” 621 Income charged 622 Person liable 623 Calculation of income 624 Income where settlor retains an interest 625 Settlor's retained interest 626 Exception for outright gifts between spouses or civil partners 627 Exceptions for certain types of income 628 Exception for gifts to charities 628B Section 628A: tainting 629 Income paid to relevant children of settlor 630 Exception for gifts to charities 630A Exception for protected foreign-source income 631 Retained and accumulated income 632 Offshore income gains 633 Capital sums paid to settlor by trustees of settlement 634 Meaning of “capital sum” and “sums paid to settlor” 635 Amount of available income 636 Calculation of undistributed income 637 Qualifications to section 636 638 Capital sums paid by way of loan or repayment of loan 639 Loans to participators in close companies 640 Grossing-up of deemed income 641 Capital sums paid to settlor by body connected with settlement 642 Exception for certain loans or repayments of loans 643 Interpretation of sections 641 and 642 643ZA “Protected foreign-source income” and “transitional trust income” 643ZB Protected foreign-source income and transitional trust income not to be taxed elsewhere in Chapter 643A Benefits paid out of protected foreign-source income or transitional trust income 643B Meaning of “untaxed benefits total” in section 643A 643C Meaning of “available protected income” in section 643A 643D Reduction in section 643A income: previous capital gains tax charge 643E Reimbursement of tax paid by settlor because of section 643B(2) 643EA Onward gifts from non-residents or qualifying new residents 643F Income attributed by section 643A to user of remittance basis 643G Section 643F(4): benefits and income “relating” to deemed income 643H Meaning of close member of settlor's family in sections 643A to 643EA 643J Cases where income treated as arising to recipient of onward gift 643K Cases where deemed income attributed to recipient of onward gift 643L Cases where settlor liable following onward gift 643N Person liable under section 643J or 643L and remittance basis applied 644 Application to settlements by two or more settlors 645 Property or income originating from settlor 646 Adjustments between settlor and trustees etc. 646A Trustees' expenses to be rateably apportioned 647 Power to obtain information 648 Income arising under a settlement 649 Charge to tax on estate income 650 Absolute, limited and discretionary interests 651 Meaning of “UK estate” and “foreign estate” 652 Estate income: absolute interests in residue 653 Meaning of “the administration period” and “the final tax year” 654 Estate income: limited interests in residue 655 Estate income: discretionary interests in residue 656 Income charged: UK estates 657 Income charged: foreign estates 658 Special rules for foreign income 659 Person liable 660 Basic amount of estate income: absolute interests 661 Basic amount of estate income: limited interests 662 Basic amount of estate income: discretionary interests 663 The applicable rate for grossing up basic amounts of estate income 664 The aggregate income of the estate 665 Assumed income entitlement 666 The residuary income of the estate 667 Shares of residuary income of estate 668 Reduction in share of residuary income of estate 669 Reduction in residuary income: inheritance tax on accrued income 670 Applicable rate for determining assumed income entitlement (UK estates) 671 Successive absolute interests 672 Successive interests: assumed income entitlement of holder of absolute interest following limited interest 673 Successive interests: payments in respect of limited interests followed by absolute interests 674 Successive interests: holders of limited interests 675 Basic amount of estate income: successive limited interests 676 Apportionments 677 Relief where UK income tax borne by foreign estate: absolute interests 678 Relief where UK income tax borne by foreign estate: limited and discretionary interests 679 Income from which basic amounts are treated as paid 679A Income from which sums within section 668(1)(b) are treated as paid 680 Income treated as bearing income tax 680A Income treated as dividend income 680B Income treated as savings income 680C Income treated as property income 681 Transfers of assets etc. treated as payments 682 Assessments, adjustments and claims after the administration period 682A Statements relating to estate income 683 Charge to tax on annual payments not otherwise charged 684 Income charged 685 Person liable 685A Settlor-interested settlements 686 Payments received after deduction of tax 687 Charge to tax on income not otherwise charged 688 Income charged 689 Person liable 689A Temporary non-residents 690 Overview of Part 6 691 National Savings Bank ordinary account interest 692 Income from savings certificates 693 Income from Ulster Savings Certificates 694 Income from individual investment plans 694A Deceased investors 695 Investment plans 695A Investment plans for children 696 Plan managers 697 Special requirements for certain foreign managers 698 Requirements for discharge of foreign institution's duties 699 Non-entitlement to exemption 700 Information 701 General and supplementary powers 702 Interest under certified SAYE savings arrangements 703 Meaning of “certified SAYE savings arrangement” 704 Types of arrangements and providers 705 Certification of arrangements 706 Withdrawal and variation of certifications and connected requirements 707 Authorisation of providers 708 Withdrawal and variation of authorisations 709 Venture capital trust dividends 710 Treatment of shares where annual acquisition limit exceeded 711 Identification of shares after disposals 712 Identification of shares after reorganisations etc. 713 Introduction: securities free of tax to residents abroad (“FOTRA securities”) 714 Exemption of profits from FOTRA securities 715 Interest from FOTRA securities held on trust 716 Restriction on deductions etc. relating to FOTRA securities 717 Exemption for part of purchased life annuity payments 718 Excluded annuities 719 Extent of exemption under section 717 720 Exempt proportion: term dependent solely on duration of life 721 Exempt sum: term dependent solely on duration of life 722 Consideration for the grant of annuities 723 Determinations 724 Regulations 725 Annual payments under immediate needs annuities 726 Meaning of “care provider” 727 Certain annual payments by individuals 728 Commercial payments 729 Payments for non-taxable consideration 730 Foreign maintenance payments 731 Periodical payments of personal injury damages 732 Compensation awards 733 Persons entitled to exemptions for personal injury payments etc. 734 Payments from trusts for injured persons 735 Health and employment insurance payments 736 Health and employment risks and benefits 737 Period for which payments may be made 738 Risk of significant loss 739 Conditions to be met by policies also providing other benefits 740 Conditions to be met where policies are linked 741 Aggregation of policies where employment ends for health reasons 742 Meaning of “the insured” 743 Policies for the benefit of others who contribute to premiums 744 Payments to adopters , etc: England and Wales 745 Payments to adopters, etc: Scotland 746 Payments to adopters, etc: Northern Ireland 747 Power to amend sections 744 to 746 748 Payments by persons liable to pool betting duty 749 Repayment interest, and interest paid under repayment supplements 749A Interest on tax overpaid 750 Interest from tax reserve certificates 751 Interest on damages for personal injury 752 Interest under employees' share schemes 753 Interest on repayment of student loan 753A Interest on unpaid relevant contributions 754 Redemption of funding bonds 755 Interest on foreign currency securities etc. owned by non-UK residents 756 Which securities and loans are foreign currency ones for section 755 756A Interest on certain deposits of victims of National-Socialist persecution 757 Interest and royalty payments: introduction 758 Exemption for certain interest and royalty payments 759 The person making the payment 760 The person beneficially entitled to the payment 761 Meaning of “25% associates” 762 Interest payments: exemption notices 763 Special relationships 764 Application of ICTA provisions about special relationships 765 Anti-avoidance 766 Interest and royalty payments: interpretation 767 Power to amend references to the Directive by order 768 Commercial occupation of woodlands 769 Housing grants 770 Amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment 771 Relevant foreign income of consular officers and employees 772 Further provisions about Orders under section 771 773 Income from Inter-American Development Bank securities 774 Income from securities issued by designated international organisations 775 Income towards reducing the national debt 775A Government bonus for savings account or other investment plan 776 Scholarship income 776A Payments under Jobs Growth Wales Plus 777 VAT repayment supplements 778 Incentives to use electronic communications 779 Gains on commodity and financial futures 780 Disabled person's vehicle maintenance grant 781 Payments under New Deal 50plus 782 Payments under employment zone programme 782A Domestic microgeneration 782B Renewables obligation certificates for domestic microgeneration 782C Volunteers etc: compensation for lost employment income 783 General disregard of exempt income for income tax purposes 783A Relief under this Chapter 783AA “Relevant trade” of an individual 783AB “Miscellaneous income” 783AC The individual's “relevant income” 783AD The individual's trading allowance 783AE Full relief: introduction 783AF Full relief: trade profits 783AG Full relief: miscellaneous income 783AH Partial relief: alternative calculation of profits: introduction 783AI Partial relief: alternative calculation of trade profits 783AJ Partial relief: alternative calculation of chargeable miscellaneous income 783AK Deductible amount: splitting of trading allowance 783AL Election for full relief not to be given 783AM Election for partial relief 783AN Exclusion from relief: expenses deducted against rent-a-room receipts 783AO Exclusion from relief: payments by employer 783AP Exclusion from relief: payments by firm 783AQ Exclusion from relief: payments by close company 783AR Interpretation of this Chapter 783B Relief under this Chapter 783BA “Relevant property business” of an individual 783BB “Relievable receipts” of a property business 783BC The individual's “relevant property income” 783BD The individual's property allowance 783BE Full relief: introduction 783BF Full relief: property profits 783BG Partial relief: alternative calculation of property profits: introduction 783BH Partial relief: alternative calculation of property profits 783BI Deductible amount: splitting of property allowance 783BJ Election for full relief not to be given 783BK Election for partial relief 783BL Exclusion from relief: tax reduction under section 274A 783BM Exclusion from relief: expenses deducted against rent-a-room receipts 783BN Exclusion from relief: payments by employer 783BO Exclusion from relief: payments by firm 783BP Exclusion from relief: payments by close company 783BQ Interpretation of this Chapter 784 Overview of Chapter 1 785 Person who qualifies for relief 786 Meaning of “rent-a-room receipts” 787 Meaning of “residence” 788 Meaning of “total rent-a-room amount” 789 The individual's limit 790 Exclusive receipts condition 791 Full rent-a-room relief: introduction 792 Full rent-a-room relief: trading income 793 Full rent-a-room relief: property income 794 Full rent-a-room relief: income chargeable under Chapter 8 of Part 5 795 Alternative calculation of profits: introduction 796 Alternative calculation of profits: trading income 797 Alternative calculation of profits: property income 798 Alternative calculation of profits: income chargeable under Chapter 8 of Part 5 799 Election not to apply full relief 800 Election for alternative methodof calculating profits 801 Time limit on adjustment of assessment 802 Minor definitions 803 Overview of Chapter 2 804 Person who qualifies for relief 804A Shared lives care: further condition for relief 805 Meaning of “qualifying care receipts” 805A Meaning of providing qualifying care 806 Meaning of providing foster care 806A Meaning of providing shared lives care 806B Meaning of “residence” 807 Calculation of “total qualifying care receipts” 808 The individual's limit 809 Share of fixed amount: residence used by more than one carer 810 Share of fixed amount: income period not a year 811 The amount per adult or child 812 Full qualifying care relief: introduction 813 Full qualifying care relief: trading income 814 Full qualifying care relief: income chargeable under Chapter 8 of Part 5 815 Alternative calculation of profits: introduction 816 Alternative calculation of profits: trading income 817 Alternative calculation of profits: income chargeable under Chapter 8 of Part 5 818 Election for alternative methodof calculating profits 819 Adjustment of assessment 820 Periods of account not ending on 5th April 821 Meaning of “relevant limit” 822 Full relief 823 Alternative method of calculating profits 824 Capital allowances: introduction 825 Unallocated capital expenditure 825A Deemed disposal event 825B Plant or machinery used for care business 825C Plant or machinery used for other qualifying activities 825D Subsequent disposal events 826 Excluded capital expenditure 827 Excluded capital expenditure: subsequent treatment of asset 828 Overlap profit 828A Indexation of the fixed amount and the amount per adult and child 829 Overview of Part 8 830 Meaning of “relevant foreign income” 831 Claims for relevant foreign income to be charged on the remittance basis 832 Relevant foreign income charged on remittance basis 832A Section 832: temporary non-residents 832B Section 832: deductions from remitted income 833 Income treated as remitted: repayment of UK-linked debts 834 Arrangements treated as repayment of UK-linked debts 835 Relief for delayed remittances 836 Relief for delayed remittances: backdated pensions 837 Claims for relief on delayed remittances 838 Expenses attributable to collection or payment of relevant foreign income 839 Annual payments payable out of relevant foreign income 840 Relief for backdated pensions charged on the arising basis 840A Claims under section 840 841 Unremittable income: introduction 842 Claim for relief for unremittable income 843 Withdrawal of relief 844 Income charged on withdrawal of relief after source ceases 845 Valuing unremittable income 845A Claim for relief for qualifying new residents 845B Qualifying new residents 845C Effect of claim, foreign employment election or foreign gain claim on losses 845D Effect of claim, foreign employment election or foreign gain claim: costs of dwelling-related loan 845E Effect of claim, foreign employment election or foreign gain claim on personal allowance etc 845F Effect of claim on relief for contributions to registered pension schemes 845G Foreign income relief ignored for purposes of determining adjusted net income 845H Qualifying foreign income 845I Disqualified income 845J Performance income 846 Overview of Part 9 847 General provisions 848 Assessment of partnerships 848A Bare trusts 849 Calculation of firm's profits or losses 850 Allocation of firm's profits or losses between partners 850A Profit-making period in which some partners have losses 850B Loss-making period in which some partners have profits 850C Excess profit allocation to non-individual partners 850D Excess profit allocation: cases involving individuals who are not partners 850E Payments by B out of the excess part of B's profit share 851 Calculations etc. where firm has other income or losses 852 Carrying on by partner of notional trade 852A Notional trades: indirect partners 853 Basis periods for partners' notional trades 854 Carrying on by partner of notional business 855 Basis periods for partners' notional businesses 855A Notional business: indirect partners 856 Overlap profits from partners' notional businesses 857 Partners to whom the remittance basis applies 858 Resident partners and double taxation agreements 859 Special provisions about farming and property income 860 Adjustment income 861 Sale of patent rights: effect of partnership changes 862 Sale of patent rights: effect of later cessation of trade 863 Limited liability partnerships 863A Limited liability partnerships: salaried members 863B Condition A 863C Condition B 863D Condition C 863E M's contribution to the limited liability partnership: the basic calculation 863F M's contribution to the limited liability partnership: deemed contributions 863G Anti-avoidance 863H Election for special provision for alternative investment fund managers to apply 863I Allocation of profit to the AIFM firm 863J Vesting of remuneration represented by the allocated profit 863K Vesting statements 863L The AIFMD remuneration guidelines 864 Overview of Part 10 865 Unpaid remuneration: non-trades and non-property businesses 866 Employee benefit contributions: non-trades and non-property businesses 867 Business entertainment and gifts: non-trades and non-property businesses 868 Social security contributions: non-trades etc. 869 Penalties , interest and VAT surcharges and interest: non-trades etc. 870 Crime-related payments: non-trades and non-property businesses 871 Apportionment etc. of miscellaneous profits to tax year 872 Losses calculated on same basis as miscellaneous income 873 Orders and regulations made by Treasury or Commissioners 874 Activities in UK sector of continental shelf 875 Meaning of “caravan” 876 Meaning of “farming” and related expressions 877 Meaning of grossing up 878 Other definitions 879 Interpretation: Scotland 880 Interpretation: Northern Ireland 881 Disapplication of corporation tax: section 9 of ICTA 882 Consequential amendments 883 Commencement and transitional provisions etc. 884 Repeals and revocations 885 Abbreviations and general index in Schedule 4 886 Short title Schedule A1 Carried Interest: interpretation of key terms SCHEDULE 1 Consequential amendments SCHEDULE 2 Transitionals and savings etc. SCHEDULE 3 Repeals and revocations SCHEDULE 4 Abbreviations and defined expressions
What to do with it
As published
222 Circumstances in which claim for two-year averaging may be made
(1) An averaging claim may be made under this section in relation to two consecutive tax years in which a taxpayer is or has been carrying on the qualifying trade, profession or vocation if—
(a) the relevant profits of one of the tax years are less than 75% of the relevant profits of the other tax year, or
(b) the relevant profits of one (but not both) of the tax years are nil.
(2) The earlier of the two years to which an averaging claim under this section relates may be a tax year in relation to which an averaging claim under this section or section 222A has already been made.
(3) An averaging claim may not be made under this section in relation to a tax year if an averaging claim has already been made under this section or section 222A in relation to a later tax year in respect of the trade, profession or vocation.
(4) An averaging claim may not be made under this section in relation to the tax year in which—
(a) the taxpayer starts, or permanently ceases, to carry on the trade, profession or vocation, or
(b) in the case of a trade, profession or vocation within section 221(2)(c), it begins or ceases to be a qualifying trade, profession or vocation.
(5) An averaging claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the second of the tax years to which the claim relates.
(6) But see section 225(4) (extended time limit if profits adjusted for some other reason).
Your wording
Your change, as a redline
222 Circumstances in which claim for two-year averaging may be made
(1) An averaging claim may be made under this section in relation to two consecutive tax years in which a taxpayer is or has been carrying on the qualifying trade, profession or vocation if—
(a) the relevant profits of one of the tax years are less than 75% of the relevant profits of the other tax year, or
(b) the relevant profits of one (but not both) of the tax years are nil.
(2) The earlier of the two years to which an averaging claim under this section relates may be a tax year in relation to which an averaging claim under this section or section 222A has already been made.
(3) An averaging claim may not be made under this section in relation to a tax year if an averaging claim has already been made under this section or section 222A in relation to a later tax year in respect of the trade, profession or vocation.
(4) An averaging claim may not be made under this section in relation to the tax year in which—
(a) the taxpayer starts, or permanently ceases, to carry on the trade, profession or vocation, or
(b) in the case of a trade, profession or vocation within section 221(2)(c), it begins or ceases to be a qualifying trade, profession or vocation.
(5) An averaging claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the second of the tax years to which the claim relates.
(6) But see section 225(4) (extended time limit if profits adjusted for some other reason).
A proposal here is not law. Support on Solon is evidence that people want the change; the official route says what it takes to make it law.