Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 189: Exception where double charge
737.This section ensures that where the release or writing off of a loan might be chargeable to tax under other provisions there is only one charge to tax. It derives from section 161(5) of ICTA.
738.Subsection (1) provides the general rule that if another provision in the Income Tax Acts applies this section does not.
739.This clarifies the position that there will be no double charge if a loan made to a participator in a close company is written off and section 421 of ICTA applies. It is a minor change to the law. See Change 34 in Annex 1.
740.Subsections (2) and (3) provide exceptions to subsection (1). In both cases it is made explicit which provision takes precedence when there is a possible double charge. This change in approach is described more fully in Note 19 in Annex 2.