In general Schedule A losses cannot, for income tax, be set off sideways against other income. However, the part of a Schedule A loss which is made up of capital allowances can be set off sideways against other income for:
You calculate the part of the Schedule A loss made up of capital allowances and available for sideways set off like this. First, you deduct any balancing charges from the capital allowances. This gives you the net capital allowances. You compare this figure with the Schedule A loss. If the net capital allowances are less than the Schedule A loss, the net capital allowances are the part of the Schedule A loss available for sideways set off. If the net capital allowances are more than the Schedule A loss the whole Schedule A loss is available for sideways set off.
