Corporation Tax

Excess management expenses

Produced by Tolley
  • 23 Mar 2022 10:31

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Excess management expenses
  • Carried-forward excess management expenses
  • Group relief of excess management expenses
  • Anti-avoidance rules on carried forward excess management expenses
  • Loss buying
  • Loss refreshing
  • Further anti-avoidance provisions post-1 April 2017

Excess management expenses

This guidance note provides details on the relief available for excess management expenses. For more 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.

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), but this rule no longer applies to excess 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

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