188ÌåÓý

ITA07/S120 (1) (Formerly ICTA88/S379A (3))

In general losses arising on a UK property business cannot, for Income Tax, be set off sideways against other income. However, the part of such a loss which is made up of capital allowances can be set off sideways against other income for:

• the year in which the loss arose, and
• the year after the year in which the loss arose.

You calculate the part of the loss on a UK property business made up of capital allowances and available for sideways set-off like this. First, you deduct any balancing charges from the capital allowances. This gives you the net capital allowances. You compare this figure with the ‘property� loss. If the net capital allowances are less than the property loss, the net capital allowances are the part of the loss available for sideways set-off. If the net capital allowances are more than the ’property� loss the whole of the loss is available for sideways set-off.