Section 38: Transfer of Deductions: Research and Development Allowances
Summary
1.This section amends the definition of “deductible amounts” in section 730B Part 14A of Corporation Tax Act 2010 (CTA 2010) to exclude an expenditure of a trade to the extent that it arises from research and development allowances under section 450 of Capital Allowances Act 2001 (CAA 2001).
Details of the Section
2.Section 730B(1) is amended by the insertion in paragraph (a), after the word “trade”, of the words “other than an amount treated as an expense by section 450(a) of CAA 2001 (research and development allowances treated as expenses in calculating profits of a trade)”. The amended definition excludes trading expenditure that comes within the definition of research and development allowances from the provisions of Part 14A CTA 2010.
3.Section 212C of CAA 2001 describes the circumstances where, on a “relevant day”, a qualifying change has happened. Where the relevant day is on or after 1 April 2014 the amended section 730B will apply.
Background Note
4.This amendment has been made to allow expenditure qualifying as research and development allowances to escape restriction by the transfer of deductions rules in Part 14A of CTA 2010.
