Section 29 — Income Tax Act 2007: Tax reductions: supplementary

Tax reductions: supplementary 29 1 This section supplements the provisions about tax reductions in Step 6 of the calculation in section 23.

2 A tax reduction may be deducted at Step 6 only so far as there is sufficient tax calculated at Step 5 of the calculation from which to deduct it.

3 In deciding whether there is sufficient tax calculated at Step 5 from which to deduct a tax reduction, tax reductions already deducted at Step 6 must be taken into account.

4 Subsections (2) and (3) apply in addition to—

a sections 36(1) to (5) and (7) and 41 of TIOPA 2010 (limits on credit for foreign tax),

and b any other provision of the Income Tax Acts that limits the amount of a tax reduction. 4A If the taxpayer is an individual, the total of the tax reductions within subsection (4B) that are deducted at Step 6 must not be greater than— A − B where— A is the amount of tax calculated at Step 5, and B is the total amount of the tax treated under section 414 (gift aid) as deducted from gifts made by the taxpayer in the tax year. 4B A tax reduction is within this subsection if it is under— Chapter 1 of Part 5 ( EIS relief), Chapter 1 of Part 5A (SEIS relief), Chapter 1 of Part 5B (relief for social investments), Chapter 2 of Part 6 ( VCT relief), or Chapter 1 of Part 7 (community investment tax relief). 4C Subsection (4A) applies in addition to subsections (2) and (3).

5 For the purposes of this Chapter, a person is treated as being entitled to a tax reduction under sections 2 and 6 of TIOPA 2010 if the person is entitled to credit against income tax under double taxation arrangements.