The following provisions of this Chapter treat amounts as expenses of management only so far as the amounts—
(a)would not otherwise be treated as expenses of management for the purposes of Chapter 2, and
(b)are not otherwise deductible from total profits, or in calculating any component of total profits.
(1)This section applies if a company with investment business is entitled to allowances by virtue of section 15(1)(g) of CAA 2001 (qualifying activities include managing investments).
(2)So far as effect cannot be given to the allowances under section 253(2) of CAA 2001, the allowances are treated for the purposes of Chapter 2—
(a)as expenses of management, and
(b)as referable to the accounting period for which the company is entitled to the allowances.
(1)This section applies if a payment—
(a)is treated as earnings of an employee by virtue of section 225 of ITEPA 2003 (payments for restrictive undertakings), and
(b)is made, or treated as made for the purposes of section 226 of that Act (valuable consideration given for restrictive undertakings), by a company with investment business.
(2)The payment is treated for the purposes of Chapter 2 as expenses of management.
(1)This section applies if a company carrying on a business that consists wholly or partly of making investments (“the employer”) makes the services of a person employed for the purposes of the business available to—
(a)a charity, or
(b)an educational establishment,
on a basis that is stated and intended to be temporary.
(2)Expenses of the employer that are attributable to the employee's employment during the period of the secondment are treated for the purposes of Chapter 2 as expenses of management.
(3)In this section—
“educational establishment” has the same meaning as in section 70, and
“the period of the secondment” means the period for which the employee's services are made available to the charity or educational establishment.
(1)This section applies if—
(a)a company with investment business (“the employer”) is liable to make payments to an individual,
(b)income tax falls to be deducted from those payments as a result of PAYE regulations, and
(c)the employer withholds sums from those payments in accordance with an approved scheme and pays the sums to an approved agent.
(2)Expenses falling within subsection (3) are treated for the purposes of Chapter 2 as expenses of management.
(3)Expenses fall within this subsection if they are incurred by the employer in making a payment to the agent for expenses which—
(a)have been incurred, or
(b)are to be incurred,
by the agent in connection with the agent's functions under the scheme.
(4)In this section “approved agent” and “approved scheme” have the same meaning as in section 714 of ITEPA 2003.
(1)This section applies if—
(a)a company with investment business (“the employer”) incurs counselling expenses,
(b)the expenses are incurred in relation to a person (“the employee”) who holds or has held an office or employment under the employer, and
(c)the relevant conditions are met.
(2)The expenses are treated for the purposes of Chapter 2 as expenses of management.
(3)In this section “counselling expenses” means expenses incurred—
(a)in the provision of services to the employee in connection with the cessation of the office or employment,
(b)in the payment or reimbursement of fees for such provision, or
(c)in the payment or reimbursement of travelling expenses in connection with such provision.
(4)In this section “the relevant conditions” means—
(a)conditions A to D for the purposes of section 310 of ITEPA 2003 (employment income exemptions: counselling and other outplacement services), and
(b)in the case of travel expenses, condition E for those purposes.
(1)This section applies if—
(a)a company with investment business (“the employer”) incurs retraining course expenses,
(b)they are incurred in relation to a person (“the employee”) who holds or has held an office or employment under the employer, and
(c)the relevant conditions are met.
(2)The expenses are treated for the purposes of Chapter 2 as expenses of management.
(3)In this section—
“retraining course expenses” means expenses incurred in the payment or reimbursement of retraining course expenses within the meaning given by section 311(2) of ITEPA 2003, and
“the relevant conditions” means—
the conditions in subsections (3) and (4) of section 311 of ITEPA 2003 (employment income exemptions: retraining courses), and
in the case of travel expenses, the conditions in subsection (5) of that section.
(4)If—
(a)an employer's liability to corporation tax for an accounting period is determined on the assumption that a deduction for expenditure is allowed by virtue of this section, and
(b)the deduction would not otherwise have been allowed,
subsections (2) to (6) of section 75 (retraining courses: recovery of tax) apply.
(1)Sections 1240 to 1242 apply if—
(a)a company with investment business (“the employer”) makes a redundancy payment or an approved contractual payment to another person (“the employee”),
(b)the payment is in respect of the employee's employment wholly in the employer's investment business or partly in the employer's investment business and partly in one or more other capacities, and
(c)expenses of management of the business are deductible under section 1219.
(2)For the purposes of this section and sections 1240 to 1243 “redundancy payment” means a redundancy payment payable under—
(a)Part 11 of the Employment Rights Act 1996 (c. 18), or
(b)Part 12 of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16)).
(3)For the purposes of this section and those sections—
“contractual payment” means a payment which, under an agreement, an employer is liable to make to an employee on the termination of the employee's contract of employment, and
a contractual payment is “approved” if, in respect of that agreement, an order is in force under—
section 157 of the Employment Rights Act 1996, or
Article 192 of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16)).
(1)This section applies if the payment is in respect of the employee's employment wholly in the employer's investment business.
(2)The amount of the payment is treated for the purposes of Chapter 2 as expenses of management.
(3)The deduction allowable by virtue of this section for an approved contractual payment must not exceed the amount which would have been due to the employee if a redundancy payment had been payable.
(4)If the payment is referable (see sections 1224 to 1227) to an accounting period beginning after the business has permanently ceased to be carried on, it is treated as referable to the last accounting period in which the business was carried on.
(1)This section applies if the payment is in respect of the employee's employment with the employer—
(a)partly in the employer's investment business, and
(b)partly in one or more other capacities.
(2)The amount of the redundancy payment, or the amount which would have been due if a redundancy payment had been payable, is to be apportioned on a just and reasonable basis between—
(a)the employment in the investment business, and
(b)the employment in the other capacities.
(3)The part of the payment apportioned to the employment in the investment business is treated as a payment in respect of the employee's employment wholly in the investment business for the purposes of section 1240.
(1)This section applies if the employer's business, or part of it, ceases (permanently) to be carried on and the employer makes a payment to the employee in addition to—
(a)the redundancy payment, or
(b)if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
(2)If—
(a)the additional payment would not otherwise be deductible under section 1219, but
(b)that is only because the business, or the part of the business, has ceased to be carried on,
the additional payment is deductible under section 1219 as expenses of management.
(3)The deduction under this section is limited to 3 times the amount of—
(a)the redundancy payment, or
(b)if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.
(4)If the payment is referable to an accounting period beginning after the business or the part of the business has ceased to be carried on, it is treated as referable to the last accounting period in which the business, or the part concerned, was carried on.
(1)This section applies if—
(a)a redundancy payment or an approved contractual payment is payable by a company with investment business (“the employer”),
(b)a payment to which subsection (2) applies is made in respect of the payment, and
(c)expenses of management of the business are deductible under section 1219.
(2)This subsection applies to—
(a)payments made by the Secretary of State under section 167 of the Employment Rights Act 1996 (c. 18), and
(b)payments made by the Department for Employment and Learning under Article 202 of the Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16)).
(3)So far as the employer reimburses the Secretary of State or Department for the payment, sections 1240 to 1242 apply as if the payment were—
(a)a redundancy payment, or
(b)an approved contractual payment,
made by the employer.
(1)This section applies if a company with investment business (“the contributor”) incurs expenses in making a contribution (whether in cash or in kind)—
(a)to a local enterprise organisation, or
(b)to an urban regeneration company.
(2)The expenses are treated for the purposes of Chapter 2 as expenses of management.
(3)But if, in connection with the making of the contribution, the contributor or a connected person—
(a)receives a disqualifying benefit of any kind, or
(b)is entitled to receive such a benefit,
the amount of the deduction allowed for the expenses under section 1219 by virtue of this section is restricted to the amount of the expenses less the value of the benefit.
(4)For this purpose it does not matter whether a person receives, or is entitled to receive, the benefit—
(a)from the local enterprise organisation or urban regeneration company concerned, or
(b)from anyone else.
(5)In this section “disqualifying benefit” means a benefit the expenses of obtaining which, if incurred by the contributor directly in a transaction at arm's length, would not be deductible as expenses of management under section 1219.
(6)Sections 83 (meaning of “local enterprise organisation”) and 86 (meaning of “urban regeneration company”) apply for the purposes of this section as they apply for the purposes of section 82.
(1)This section applies if—
(a)a sum is payable by a company with investment business to the Export Credits Guarantee Department, and
(b)the sum is payable under an agreement entered into as a result of arrangements made under section 2 of the Export and Investment Guarantees Act 1991 (c. 67) (insurance in connection with overseas investment), or with a view to entering into such an agreement.
(2)The sum is treated for the purposes of Chapter 2 as expenses of management.
(1)Sums—
(a)spent by a company with investment business in paying a levy, or
(b)paid by a company with investment business as a result of an award of costs under costs rules,
are treated for the purposes of Chapter 2 as expenses of management.
(2)In this section “costs rules” has the meaning given by section 92(2).
(3)In this section “levy” has the meaning given by section 92(3).