Finance Act 1994

212 Chargeable periods for income tax purposes

(1) For section 160 of the [1990 c. 1.] Capital Allowances Act 1990 there shall be substituted the following section—

“160 Meaning of “period of account”

(1) In this Act as it applies for income tax purposes, “period of account” has the meaning given by the following provisions of this section.

(2) In the case of a person to or on whom an allowance or charge falls to be made in taxing his trade, profession or vocation, “period of account” means, subject to subsections (3) and (4) below, any period for which accounts are made up for the purposes of the trade, profession or vocation.

(3) For the purposes of subsection (2) above—

(a) where two periods of account overlap, the period common to both shall be deemed to fall in the first period of account only; and

(b) where there is an interval between two periods of account, the interval shall be deemed to be part of the first period of account.

(4) For the purposes of subsection (2) above, where a period of account (“the original period”) would, apart from this subsection, be a period of more than 18 months, that period shall be deemed to be divided into as many separate periods of account—

(a) the first beginning with the commencement date of the original period; and

(b) each subsequent one beginning with an anniversary of that date,

as may be necessary to secure that none of those periods of account is a period of more than 12 months.

(5) In the case of any other person to or on whom an allowance or charge falls to be made under Parts I to VI or this Part, “period of account” means any year of assessment.

(6) Any reference in this section to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.”

(2) In subsection (2) of section 161 of that Act (other interpretative provisions), for the definitions of “chargeable period” and related expressions there shall be substituted the following definitions—

““chargeable period” means an accounting period of a company or a period of account, and a reference to a “chargeable period related to” the incurring of expenditure, or a sale or other event, is a reference to the chargeable period in which the expenditure is incurred, or the sale or other event takes place;”.