Section 1306: Losses calculated on same basis as miscellaneous income
3341.This section is based on numerous provisions, including section 827 of ICTA. The corresponding rule for income tax is in section 872 of ITTOIA.
3342.The application of the section is limited to “miscellaneous income”, defined in subsection (3) by reference to section 834A of ICTA (inserted by Schedule 1 to this Act). The source legislation does not generally limit the scope of the rule. For example, section 827(1) of ICTA says “the payment shall not be allowed as a deduction in computing any income, profits or losses for any corporation tax purposes”. But in practice this section affects only the calculation for corporation tax purposes of amounts, other than profits within Part 3 or 4 of this Act, chargeable under a provision listed in the table in section 834A of ICTA.
3343.Subsection (2) ensures that this rule does not overturn any rules about the calculation of losses. For example, see section 398 of ICTA (which deals with the calculation of losses for the purposes of a claim under section 396 of ICTA).
3344.See the related commentary on section 47 of this Act.