Excess management expenses

By Tolley in partnership with Jackie Barker of Wells Associates

The following Corporation Tax guidance note by Tolley in partnership with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:

  • Excess management expenses
  • Carried-forward excess management expenses
  • Group relief
  • Anti-avoidance rules on carried forward excess management expenses

This note provides guidance on the relief available for excess management expenses. For general information on these expenses, please refer to the Management expenses guidance note.

Carried-forward excess management expenses

Allowable management expenses arising from 1 April 2017 that exceed a company’s total profits and cannot be relieved in full in the current accounting period and have not been surrendered as group relief, are carried forward and may be deducted from the company’s total profits of the next accounting period. This is as long as the company carries out an investment business in the next accounting period. A claim is required, within two years of the end of the period in which the company wishes to set off the carried-forward management expenses against total profits.

CTA 2009, s 1223

Allowable management expenses arising before 1 April 2017 were available for set-off against future total profits but were prioritised as an automatic deduction under CTA 2009, s 1219(1A), this rule no longer applies to management expenses carried forward.

Any qualifying charitable donations which are paid during the accounting period that relate to the company’s investment business may also be carried forward and added to the excess management expenses in order to obtain relief in

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