Defining long funding leases: election: time limit for making an election (SI2007/304 regulation 2(3))
An election must be made within the permitted time.
The time limit for making an election may come before the time limit for making a return or amended return. For example, if a company’s filing date is more than 12 months after the end of the period for which the return is made, the latest date for amending a return will be later than the latest date allowed for making an election.
The permitted time depends on whether the election is made for the purposes of corporation tax or income tax.
In the case of corporation tax the permitted time is the two-year period starting at the end of the chargeable period in which the effective date falls.
For example, A Ltd’s accounting date is 31 December. A Ltd wants to make an election with effect from 1 April 2006. Therefore the election must be made in the return, or in an amended return
- for the period ended 31 December 2006, and
- before 31 December 2008, whether or not an amended return may be made after that date.
In the case of income tax the permitted time is the period from the end of the year of assessment (tax year) to which the election relates to 31st January in the second year following the end of the year of assessment to which the election relates.
The election relates to a particular year of assessment if the effective date falls in the basis period for that year.
For example Mr B has an accounting year end of 30 April. He wants to make an election with effect from 1 May 2007. The effective date is 1 May 2007 which falls in the year to 30 April 2008 which is the basis period for the 2008/09 year of assessment. Therefore the election must be made in the return, or in an amended return
- for 2008/09,
- which is made on or before 31 January 2011, whether or not an amended return may be made after that date.