Taxes Consolidation Act 1997 section 531AU

Capital allowances and losses

Section 531AU sets out the rules for determining the amount of trading losses and capital allowances that may be deducted when computing an individual's income chargeable to universal social charge (USC).

• Where unused trading or professional losses are carried forward, only the amount actually used to reduce taxable income from the same trade or profession in the later tax year is deductible for USC purposes.
• Capital allowances deductible for USC are limited to wear and tear allowances for plant and machinery, writing-down allowances for industrial buildings, and allowances for farm buildings (including pollution control allowances).
• The deductible amount is the allowance used in the tax year (excluding any allowance used to create or increase a loss claimed against other income) plus any unused allowance carried forward from an earlier year.
• Capital allowances given to lessors or to non-active partners in a partnership are not deductible for USC purposes.