[F1407Amounts not brought into account in determining a company's tax-EBITDAU.K.
(1)An amount is an excluded amount for the purposes of conditions A and B in section 406 if it is any of the following—
(a)a tax-interest expense amount or a tax-interest income amount [F2(or an amount which would, apart from section 388, be a tax-interest income amount);]
(b)an allowance or charge under CAA 2001;
(c)an excluded relevant intangibles debit or an excluded relevant intangibles credit (see section 408);
(d)a loss that—
(i)is made by the company in an accounting period other than that mentioned in section 406(2), and
(ii)is not an allowable loss for the purposes of TCGA 1992;
(e)a deficit from the company's loan relationships for an accounting period other than that mentioned in section 406(2);
(f)expenses of management of the company that are referable to an accounting period other than that mentioned in section 406(2);
(g)a deduction under section 137 of CTA 2010 (group relief) or section 188CK of that Act (group relief for carried-forward losses) if and to the extent that it constitutes a loss of the worldwide group;
[F3(ga)a reduction under paragraph 37(3)(b) of Schedule 5 to FA 2019 (non-UK resident companies carrying on UK property businesses etc: unrelieved amounts);]
(h)a qualifying tax relief.
(2)For the purposes of subsection (1)(g) the deduction constitutes a “loss of the worldwide group” if and to the extent that it comprises surrenderable amounts that are referable to times at which the surrendering company was a member of the worldwide group.
(3)An amount is a qualifying tax relief for the purposes of subsection (1)(h) if it is any of the following—
(a)an R&D expenditure credit [F4under Chapter 1A of Part 13] of CTA 2009;
(b)a deduction under section 1044, 1063, 1068 or 1087 of CTA 2009 (additional relief for expenditure on research and development);
(c)an amount which is treated as a trading loss as a result of section 1092 of CTA 2009 (SMEs: deemed trading loss for pre-trading expenditure);
(d)a deduction under section 1147 or 1149 of CTA 2009 (relief for expenditure on contaminated or derelict land);
(e)a deduction under section 1199 of CTA 2009 (film tax relief);
(f)a deduction under section 1216CF of CTA 2009 (television tax relief);
(g)a deduction under section 1217CF of CTA 2009 (video games tax relief);
(h)a deduction under section 1217H of CTA 2009 (relief in relation to theatrical productions);
(i)a deduction under section 1217RD of CTA 2009 (orchestra tax relief);
(j)a deduction under section 1218ZCE of CTA 2009 (museums and galleries exhibition tax relief);
(k)a qualifying charitable donation (whether made in the accounting period mentioned in section 406(2) or an earlier one);
(l)a deduction under section 357A of CTA 2010 (profits from patents etc chargeable at lower rate of corporation tax).
(4)An amount is an excluded amount for the purposes of condition B in section 406 if it is an allowable loss for the purposes of TCGA 1992.]
Textual Amendments
F1Pt. 10: the existing Pt. 10 renumbered as Pt. 11 (except for ss. 375, 376 which are repealed), the existing ss. 372-374, 377-382 renumbered as ss. 499-507 and a new Pt. 10 (ss. 372-498) inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1, 10(1)(2)(a)(3) (with Sch. 5 paras. 27, 32-34)
F2Words in s. 407(1)(a) inserted (with effect in accordance with Sch. 3 para. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 5(2)
F3S. 407(1)(ga) inserted (with effect in accordance with Sch. 3 para. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 5(3)
F4Words in s. 407(3)(a) substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 14(4)(a), 16; S.I. 2024/286, reg. 2