Corporation Tax Act 2010

699 Restrictions on the deduction of expenses of management

(1) This section has effect for the purpose of restricting deductions for expenses of management.

(2) Any amounts which—

(a) are, or are treated as, expenses of management referable to the actual accounting period, and

(b) are apportioned to either of the two notional accounting periods in accordance with section 702,

are treated for the purposes of Chapter 2 of Part 16 of CTA 2009 (companies with investment business) as expenses of management referable to that notional accounting period.

(3) Any allowances which are apportioned to either of the notional accounting periods in accordance with section 702 are treated for the purposes of section 253 of CAA 2001 and section 1233 of CTA 2009 (companies with investment business: excess capital allowances) as falling to be made in that notional accounting period.

(4) Subsection (5) applies if, in accordance with the relevant provisions and section 702, an amount is included in respect of chargeable gains or, as the case may be, non-trading chargeable realisation gains in the total profits of the accounting period of the company in which the relevant gain accrues or arises.

(5) In calculating the taxable total profits of the accounting period of the company in which the relevant gain accrues or arises, no deduction may be made under section 1219 of CTA 2009 (expenses of management of a company’s investment business) by reference to—

(a) expenses of management deductible for an accounting period beginning before the change in ownership, or

(b) allowances falling to be made for such an accounting period,

from so much of the total profits of the accounting period as represents the relevant gain.