Division D1.4 Research and development tax reliefs
Overview of research and development (R&D) tax relief
D1.401 Summary of R&D tax relief
Qualifying expenditure on research and development is relieved as follows:
• for a trading business including a trading company, expenditure that is revenue in nature is deducted in the ordinary way in computing the profit or loss from that trade. For this purpose, R&D includes oil and gas exploration and appraisal1. Further details on the ordinary trading deduction are covered in B2.467.
• for a trading business including a trading company, expenditure that is capital in nature is eligible for a 100% R&D allowance2. Further details on the R&D allowance are covered in Division B3.7.
• in addition to the above, for corporates only, ie a body corporate or unincorporated association, but not including a partnership, a co-ownership scheme, a local authority or local authority association3, expenditure on qualifying R&D may be eligible for additional reliefs. These additional reliefs
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