Commentary

D7.322 Calculation of restriction of carry forward of management expenses

Corporate tax
Corporate tax | Commentary

D7.322 Calculation of restriction of carry forward of management expenses

Corporate tax | Commentary

D7.322 Calculation of restriction of carry forward of management expenses

Where the anti-avoidance provisions described in D7.320 apply, the accounting period in which the change of ownership takes place (AP) is divided into two parts, one being the part up to the date of change (AP1) and the other the part after that date (AP2). For the purpose of these provisions, the two parts are treated as separate accounting periods1.

The amounts taken into the corporation tax computation for period AP are apportioned to periods AP1 and AP2 in accordance with the following rules2.

  1.  

    (a)     Any management expenses referable to period AP (excluding amounts brought forward from the previous period) are apportioned to periods AP1 and AP2 by apportioning to each period the amounts which would fall to be brought into account in that period if accounts were drawn up in accordance with generally acceptable accounting practice. This does not apply to expenses deductible other than under CTA 2009, s 1219.

  2.  

    (b)     Any qualifying charitable donations paid in period AP wholly and exclusively for the purposes of the company's investment business are apportioned to periods AP1 and AP2 by

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