A CONSULTATION document has been released by government to receive views on proposed changes to loss relief provisions for self-employed individuals and companies.

The document has been produced by the Income Tax Division and reflects the increasing number of individuals and companies sustaining losses during the economic downturn.

A spokesman said, “As corporate and non-corporate taxpayers are now treated differently for income tax purposes, we are proposing to update the loss relief provisions for the respective taxation regimes by way of Tynwald Orders. The new provisions will, however, provide similar reliefs for both types of taxpayer.”

The regulations governing how trading losses can be relieved for tax purposes were approved by Tynwald in 1988.

The new provisions will provide similar reliefs for both types of taxpayer and will be brought about by Tynwald Orders, one covering losses incurred by corporate taxpayers and the other addressing losses incurred by non-corporate taxpayers. 

An outline of the proposals, and copies of the two draft Orders, are contained in a Proposal Document which has been published today by the Income Tax Division on behalf of Treasury.

The list of subjects covered includes:- Losses for which relief can be obtained; Non-corporate taxpayers – income from a trade; Methods of obtaining relief; Capital allowances; Pre-trading expenditure; Loss in the early years of a trade; Deduction from general income; Loss carry forward; Terminal losses and Restriction of loss relief.

Anyone wishing to submit views on the proposals should do so by August 26.

The Proposal Document can be viewed on the Income Tax Division’s website at: 

http://www.gov.im/treasury/incometax/consultations.gov. Alternatively, a paper copy can be obtained from the Division or by contacting General Enquiries on 685400.