Revenue eBrief No. 176/20

 22 September 2020

Tax and Duty Manual on income tax relief for losses incurred in a trade or profession updated.

Tax and Duty Manual Part 12-01-02 contains guidance on the legislative provisions that provide for income tax relief for losses incurred in a trade or profession.  It also provides an overview of provisions that restrict loss relief in certain circumstances.

The manual has been updated as follows:

• to include a reference to the temporary income relief for self-employed individuals, which was introduced in the Financial Provisions (Covid-19) (No. 2) Act 2020.  (paragraph 2.4)

• to confirm that where loss relief is given under section 381, the amount by which the loss reduces a particular class or source of income will be regarded as a specific deduction made from that class or source of income in computing the individual's total income for the year.  (paragraph 4.0)

• to include guidance on the application of section 403(3), which provides that the set-off of surplus capital allowances against other income is generally not available in the case of leasing capital allowances.  (paragraph 5.4.1)