Income and Corporation Taxes Act 1988

6 (1) The amount for part of an accounting period of any description of income referred to in paragraph 4 or 5 above shall be a proportionate part of the amount for the whole period.

(2) In determining the amount for any period of any description of income referred to in paragraph 4 or 5 above, any deduction from the company’s profits for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description shall be treated as made—

(a) first, from the company’s income charged to corporation tax other than estate or trading income;

(b) secondly, so far as it cannot be made under paragraph (a) above, from the company’s estate or trading income so charged;

(c) thirdly, so far as it cannot be made under paragraph (a) or (b) above, from the amount included in the company’s profits in respect of chargeable gains.

(3) In the application of sub-paragraph (2) above to a company which is a trading company or a member of a trading group there shall be substituted for paragraph (b) the following paragraphs—

“(b) secondly, so far as it cannot be made under (a) above, from the company’s estate income so charged;

(bb) thirdly, so far as it cannot be made under (a) or (b) above, from the company’s trading income so charged;”

and in paragraph (c) for “thirdly” there shall be substituted “fourthly”, and for “(a) or (b)” there shall be substituted “(a), (b) or (bb)”.