Taxes Consolidation Act 1997 section 395

Relief affected by subsequent changes of law, etc

Section 395 provides for the adjustment of relief already given under section 392(1) where a subsequent change in law or a post-year event affects the amount of capital allowances on which that relief was based.

• Capital allowances used to create or increase a trading loss under section 392(1) may be claimed before the Finance Act for that year has been enacted.
• If a subsequent change in law, a permanent cessation of trade, or another post-year event means that the relief given was excessive, a correcting adjustment must be made.
• Any tax repaid in excess of the amount that should properly have been repaid is recovered by means of a Case IV of Schedule D assessment.
• To facilitate that assessment, the amount of the capital allowances concerned is treated as Case IV income for the year of claim and must be included in the taxpayer's return for that year.

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