Annex 1: Minor Changes in the Law Change 102: Repeal of paragraph 5 of Schedule 30 to ICTA: Schedule 1
This change concerns the repeal of paragraph 5 of Schedule 30 to ICTA.
Paragraph 5 of Schedule 30 to ICTA is a transitional measure that relates to the pre-1963 version of Schedule A. Under that version of Schedule A, a company which owned the property from which it carried on a trade was allowed a Schedule D Case I deduction equal to the amount of the Schedule A charge on the property. The right to the deduction was removed when Schedule A moved from a charge on the annual value of the property to a charge on the rent received.
At that time companies were liable to income tax not corporation tax. Timing differences between Schedule D Case I and Schedule A could result in a loss of relief if the company ceased to occupy the property for the purposes of the trade in a period in which it did not also cease to carry on the trade. FA 1963 introduced a deduction to compensate for this loss of relief. It is based on the relief that would have been given for the years 1963-64 and 1964-65 and is allowed in calculating the trade profits for the accounting period in which the company ceases to carry on the trade.
In theory it is still possible to claim the relief but given the passage of 45 years and the effects of inflation it is unlikely any new claims will be made on or after 1 April 2009. For this reason paragraph 5 of Schedule 30 to ICTA is redundant and can be repealed.
Paragraph 5 was repealed for income tax by the amendments made by paragraph 352 of Schedule 1 to ITTOIA.
This change completes the repeal for all tax purposes of a relieving provision.
This change is adverse to some taxpayers in principle. But it is expected to have no practical effect.