Textual Amendments
F1Pt. 8A inserted (with effect in accordance with Sch. 2 paras. 7, 8 of the amending Act) by Finance Act 2012 (c. 14), Sch. 2 para. 1(1)
(1)For the purposes of this Part the “total gross income” of a trade of a company for an accounting period is the aggregate of the amounts falling within the Heads set out in—
(a)subsection (3) (revenue),
(b)subsection (5) (compensation),
(c)subsection (6) (adjustments),
(d)subsection (7) (proceeds from intangible fixed assets),
(e)subsection (8) (profits from patent rights).
(2)But the total gross income of the trade does not include any finance income (see section 357CB).
(3)Head 1 is any amounts which—
(a)in accordance with generally accepted accounting practice (“GAAP”) are recognised as revenue in the company's profit and loss account or income statement for the accounting period, and
(b)are brought into account as credits in calculating the profits of the trade for the accounting period.
(4)Where the company does not draw up accounts for an accounting period in accordance with GAAP, the reference in subsection (3)(a) to any amounts which in accordance with GAAP are recognised as revenue in the company's profit and loss account or income statement for the accounting period is to be read as a reference to any amounts which would be so recognised if the company had drawn up such accounts for that accounting period.
(5)Head 2 is any amounts of damages, proceeds of insurance or other compensation (so far as not falling within Head 1) which are brought into account as credits in calculating the profits of the trade for the accounting period.
(6)Head 3 is any amounts (so far as not falling within Head 1) which are brought into account as receipts under section 181 of CTA 2009 (adjustment on change of basis) in calculating the profits of the trade for the accounting period.
(7)Head 4 is any amounts (so far as not falling within Head 1) which are brought into account as credits under Chapter 4 of Part 8 of CTA 2009 (realisation of intangible fixed assets) in calculating the profits of the trade for the accounting period.
(8)Head 5 is any profits from the sale by the company of the whole or part of any patent rights held for the purposes of the trade which are taxed under section 912 of CTA 2009 in the accounting period.
(1)For the purposes of this Part “finance income”, in relation to a trade of a company, means—
(a)any credits which are treated as receipts of the trade by virtue of—
(i)section 297 of CTA 2009 (credits in respect of loan relationships), or
(ii)section 573 of CTA 2009 (credits in respect of derivative contracts),
(b)any amount which in accordance with generally accepted accounting practice falls to be recognised as arising from a financial asset, and
(c)any return, in relation to an amount, which—
(i)is produced for the company by an arrangement to which it is party, and
(ii)is economically equivalent to interest.
(2)In subsection (1)—
“economically equivalent to interest” is to be construed in accordance with section 486B(2) and (3) of CTA 2009, and
“financial asset” means a financial asset as defined for the purposes of generally accepted accounting practice.
(3)For the purposes of subsection (1)(c), the amount of a return is the amount which by virtue of the return would, in calculating the company's chargeable profits, be treated under section 486B of CTA 2009 (disguised interest to be regarded as profit from loan relationship) as a profit arising to the company from a loan relationship.
But, in calculating that profit for the purposes of this subsection, sections 486B(7) and 486C to 486E of that Act are to be ignored.]