Corporation Tax Act 2010

Insurance company expenses: restriction and carrying forward of relief

839 Deduction under section 76 of ICTA not to exceed commercial rent

(1) Subsection (3) applies to the calculation of the deduction under section 76 of ICTA allowed for the non-excluded element of the payment within section 835(2) or 836(2).

(2) For the purposes of this section the non-excluded element of a payment is the element of the payment not excluded under section 843 (service charges etc).

(3) The deduction must not exceed the commercial rent for the period for which the payment is made (see section 844 or 845).

840 Carrying forward parts of payments

(1) This section applies if—

(a) section 839 has effect, and

(b) conditions A and B are met.

(2) Condition A is that under section 839 part of a payment which would otherwise be allowed as a deduction under section 76 of ICTA is not allowed.

(3) Condition B is that one or more later payments are made, by the transferor or a person associated with the transferor, under—

(a) the lease (if section 839 has effect because of section 835(2)), or

(b) the rentcharge or other transaction mentioned in section 836(2)(b) (if section 839 has effect because of section 836(2)).

(4) The part of the payment mentioned in subsection (2) may be carried forward and treated for the purposes of a deduction under section 76 of ICTA as if it were made—

(a) when the next of the later payments is made, and

(b) for the period for which that later payment is made.

(5) So far as a part of a payment carried forward under this section is not allowed as a deduction under section 76 of ICTA, it may be carried forward again under this section.

841 Aggregation and apportionment of payments

(1) This section applies for the purposes of section 839.

(2) If more than one payment is made for the same period the payments must be taken together.

(3) If payments are made for periods which overlap—

(a) the payments must be apportioned, and

(b) the apportioned payments which belong to the common part of the overlapping periods must be taken together.

(4) References in subsections (2) and (3) to payments include references to parts of payments which under section 840 are treated as if made later than they were made.

842 Payments made for later periods

(1) This section applies for the purposes of sections 839 to 841.

(2) For the purposes of this section the relevant year, in relation to a payment, is the year which begins with the date it is made.

(3) If a payment is made for a period all of which is after the relevant year, it must be treated as made for the relevant year.

(4) If a payment is made for a period part of which is after the relevant year, it must be treated as if a corresponding part of it was made for the relevant year (and no part for a later period).