Commentary

D7.311 Method of granting relief

Corporate tax
Corporate tax | Commentary

D7.311 Method of granting relief

Corporate tax | Commentary

D7.311 Method of granting relief

Management expenses are allowed as far as possible as a deduction in computing total profits for an accounting period1. The deduction is statutory and does not have to be claimed. Expenses (with the exception of expenses carried forward2) are deducted before deducting qualifying charitable donations3 and before reliefs given by set-off, eg trading losses4.

The amount of management expenses to be deducted is reduced by the amount of any income received in the course of the management business derived from sources not charged to tax.

In the case of a non-resident company this is limited to income received from property or rights used by or held for a business carrying on a business through a permanent establishment in the UK. No deduction is made in any circumstances for exempt ABGH distribution income (on or after 6 April 2016) or franked investment income (before 6 April 2016)5. The term 'AGBH distribution' was introduced as part of the changes introduced to dividend taxation from 6 April 2016 which included abolition of the dividend tax credit, changes to dividend tax rates and the introduction of a dividend allowance. An exempt AGBH distribution is a distribution that6:

  1.  

    (a)     falls within CTA 2010, s

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