Section 1219: Expenses of management of a company’s investment business
3086.This section sets out what are “expenses of management”. It is based on section 75 of ICTA.
3087.There is no explicit definition of “expenses of management” either in the source legislation or in this Act. Instead, the limits of the expression are set by:
case law, in which the expression (retained in this Act) has been considered;
general exclusions set out in this section;
specific reliefs set out in Chapter 3 of this Part; and
specific restrictions set out in Chapter 4 of this Part.
3088.Subsection (1) ties the expenses to the management of the company’s investment business (defined in section 1218), and to the accounting period to which the expenses are “referable” (see section 1224).
3089.The section provides that the expenses are allowed as a deduction, echoing the words of Part 3 (trading income). HMRC guidance (see paragraph 8580 of the Company Taxation Manual) suggests that the deduction of management expenses is mandatory. But this amounts to the same thing.
3090.Both restrictions in subsection (2) apply for the purposes of this Part (see section 1218).
3091.Subsection (3) excludes capital expenditure, in terms that follow closely the trading income rule. It also prevents a deduction as management expenses for anything that is otherwise allowable for tax purposes.