(1)This section applies if a company incurs expenses in setting up a qualifying employee share ownership trust (within the meaning of Schedule 5 to FA 1989).
(2)A deduction for the expenses is to be made in calculating for corporation tax purposes the profits of a trade or property business carried on by the company.
This is subject to subsections (3) and (4).
(3)If the company is a company with investment business (as defined in section 1218), the expenses are treated as expenses of management of the company.
But this subsection does not apply if the company's business is a property business (in which case subsection (2) applies instead).
(4)If the company is a company in relation to which section 76 of ICTA (expenses of insurance companies) applies, the expenses are treated as expenses payable falling to be brought into account at Step 1 in subsection (7) of that section.
(5)If the trust is established more than 9 months after the end of the period of account in which the expenses are incurred—
(a)for the purposes of subsection (2) the deduction is to be made for the period of account in which the trust is established, or
(b)for the purposes of subsection (3) or (4) the expenses are treated as referable to the accounting period in which the trust is established.
(6)For the purposes of subsection (5) a trust is established when the deed under which it is established is executed.
(7)So far as this section provides for a deduction to be allowed, it has effect despite section 53 (no deduction for items of a capital nature in calculating trading profits), including that section as applied by section 210 to the calculation of profits of a property business.