Taxes Consolidation Act 1997 section 391

Interpretation (Chapter 2)

Section 391 sets out definitions and rules for interpreting key terms used in the Chapter governing the use of capital allowances to augment a trading loss under section 392.

• The "year of claim" is the year of assessment for which a loss relief claim under section 381 is made; capital allowances and balancing charges for that year are those arising from the trade's assets for that specific year, excluding amounts carried forward from earlier years.
• Where allowances carried forward from earlier years are in the mix, those carried-forward amounts are treated as being used first, before allowances arising in the current year of assessment.
• "Non-effective" capital allowances are those that cannot be set against the profits of the trade in a given year simply because there are insufficient profits to absorb them.
• The Chapter applies equally to professions (including vocations) and employments, not just trades.