Corporation Tax Act 2009

Chapter 5 Supplementary

926 Contributions to expenditure

(1) For the purposes of sections 910, 913 and 924, the general rule is that a company is to be regarded as not having incurred expenditure so far as it has been, or is to be, met (directly or indirectly) by—

(a) a public body, or

(b) a person other than the company.

(2) In this Chapter “public body” means the Crown or any government, local authority or other public authority (whether in the United Kingdom or elsewhere).

(3) The general rule does not apply to the expenses mentioned in section 913(2)(b) (incidental expenses incurred by a seller of patent rights).

(4) The general rule is subject to the exception in section 927.

927 Contributions not made by public bodies nor eligible for tax relief

(1) A company is to be regarded as having incurred expenditure (despite section 926(1)) so far as the requirements in subsections (2) and (3) are met in relation to the expenditure.

(2) The first requirement is that the person meeting the company’s expenditure (“X”) is not a public body.

(3) The second requirement is that—

(a) no allowance can be made under Chapter 2 of Part 11 of CAA 2001 (contribution allowances) in respect of X’s expenditure, and

(b) the expenditure is not allowed to be deducted in calculating the profits of a trade, profession or vocation carried on by X.

(4) When determining for the purposes of subsection (3)(a) whether such an allowance can be made, assume that X is within the charge to tax.

928 Exchanges

(1) In this Part references to the sale of property include the exchange of property.

(2) In this section—

• references to property include know-how, and

• references to the sale of property include the disposal of know-how.

(3) For the purposes of subsection (1), any provision of this Part referring to a sale has effect with the necessary modifications, including, in particular, those in subsections (4) and (5).

(4) References to the proceeds of sale and to the price include the consideration for the exchange.

(5) References to capital sums included in the proceeds of sale include references to so much of the consideration for the exchange as would have been a capital sum if it had been a money payment.

929 Apportionment where property sold together

(1) Any reference in this Part to the sale of property includes the sale of that property together with other property.

(2) In this section—

• references to property include know-how, and

• references to the sale of property include the disposal of know-how.

(3) For the purposes of subsection (1), all property sold as a result of one bargain is to be treated as sold together even though—

(a) separate prices are, or purport to be, agreed for separate items of that property, or

(b) there are, or purport to be, separate sales of separate items of that property.

(4) If an item of property is sold together with other property, then, for the purposes of the charges under sections 908 and 912—

(a) the net proceeds of the sale of that item are treated as being so much of the net proceeds of the sale of all the property as, on a just and reasonable apportionment, is attributable to that item, and

(b) the expenditure incurred on the provision or purchase of that item is treated as being so much of the consideration given for all the property as, on a just and reasonable apportionment, is attributable to that item.

930 Questions about apportionments affecting two or more persons

(1) Any question about the way in which a sum is to be apportioned under section 929 must be determined in accordance with section 563(2) to (6) of CAA 2001 (procedure for determining certain questions affecting two or more persons) if it materially affects two or more taxpayers.

(2) For the purposes of subsection (1) a question materially affects two or more taxpayers if at the time when the question falls to be determined it appears that the determination is material to the liability to tax (for whatever period) of two or more persons.

931 Meaning of “capital sums” etc

Section 4 of CAA 2001 (meaning of “capital sums” etc) applies in relation to this Part as it applies in relation to that Act.