Section 412D | How carry-forward relief works ^F1

(1)This subsection explains how deductions are to be made under section 412C.The amount to be deducted at any step is limited in accordance with section 25(4) and (5).^F1

Step 1 Deduct the outstanding amount or (in a case within section 412C(1)(b)(ii)) the part of the outstanding amount not capable of being deducted under sections 412A and 412B from the lending income for the first tax year following the relevant year.

Step 2 Deduct from the lending income for the second tax year following the relevant year any part of the outstanding amount not previously deducted.

Step 3 Apply Step 2 in relation to the lending income for the third and fourth tax years following the relevant year, stopping if all of the outstanding amount is deducted.

(2)In this section—^F1

“lending income” means income of a kind mentioned in section 412C(3);

“relevant year” has the meaning given by section 412C(1)(b).