Corporation Tax Act 2010

Apportionment

880 Apportionment of payments made and of sums obtained

(1) This section applies for the purposes of this Chapter.

(2) Subsection (3) applies if—

(a) a payment is made,

(b) it is one for which a deduction by way of relevant tax relief is allowed, and

(c) it is made by persons carrying on a trade, profession or vocation in partnership.

(3) The payment must be apportioned in a manner which is just and reasonable.

(4) Subsection (5) applies if—

(a) a sum is obtained in respect of an interest in an asset,

(b) the sum is obtained by persons carrying on a trade in partnership, and

(c) the asset is and continues to be used for the purposes of the trade.

(5) The sum must be apportioned between the partners in the shares in which they are entitled to the profits of the trade at the time the sum is obtained.

(6) Subsection (7) applies if—

(a) a sum is obtained in respect of an interest in an asset, and

(b) the sum is obtained by persons jointly entitled to the interest.

(7) The sum must be apportioned according to their respective rights in the interest.

(8) Subsections (6) and (7) are subject to subsections (4) and (5).

881 Manner of apportionment

(1) Subsections (2) and (3) apply if—

(a) a payment or sum is to be apportioned under section 880 or under section 681DJ of ITA 2007,

(b) at the time of the apportionment it appears that it is material to the liability to tax (whether corporation tax or income tax, and for whatever period) of two or more persons (in this section referred to collectively as “the set”),

(c) a question arises as to the manner in which the payment or sum is to be apportioned, and

(d) at the time of the apportionment, it appears that the apportionment is material to the corporation tax liability (for whatever period) of—

(i) a person, or some two or more persons, in the set, or

(ii) all the persons in the set.

(2) For the purposes of corporation tax of the person or persons mentioned in subsection (1)(d), the question is to be determined in the same way as an appeal.

(3) All the persons in the set are entitled to be a party to the proceedings.