Income and Corporation Taxes Act 1988

105 Allowable deductions. U.K.

M1 (1) In computing the charge to [F1 corporation tax] in respect of sums received by any [F2 company] which are chargeable to [F1 corporation tax] by virtue of section 103 or 104(1) (including amounts treated as sums received by [F3 it] by virtue of section 103(4)), there shall be deducted from the amount which, apart from this subsection, would be chargeable to [F1 corporation tax]—

(a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade, profession or vocation had not been discontinued, would have been deducted in computing for tax purposes the [F4 profits] of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those [F4 profits] as so computed, and

(b) any capital allowance to which the person who carried on the trade, profession or vocation was entitled immediately before the discontinuance and to which effect has not been given by way of relief before the discontinuance.

(2) No amount shall be deducted under subsection (1) above if that amount has been allowed under any other provision of the Tax Acts [F5 or by virtue of section 90(4) of the Finance Act 1995].

(3) No amount shall be deducted more than once under subsection (1) above; and—

(a) any expense or debit shall be apportioned between a sum chargeable under section 103 and a sum chargeable under section 104(1) in such manner as may be just;

(b) as between sums chargeable, whether under section 103 or 104(1), for one [F6 accounting period] and sums so charged for a subsequent [F6 accounting period], any deduction in respect of a loss or capital allowance shall be made against sums chargeable for the earlier [F6 accounting period];

(c) subject to paragraph (b) above, as between sums chargeable for any [F6 accounting period] under section 103 and sums so chargeable under section 104(1), any deduction in respect of a loss or capital allowance shall be made against the last-mentioned sums rather than the first-mentioned;

but, in the case of a loss which is to be allowed after the discontinuance, not so as to authorise its deduction from any sum chargeable for a [F6 accounting period] preceding that in which the loss is incurred.

(4) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Words in s. 105(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 84(2)(a) (with Sch. 2)

F2 Word in s. 105(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 84(2)(b) (with Sch. 2)

F3 Word in s. 105(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 84(2)(c) (with Sch. 2)

F4 Words in s. 105(1)(a)(4) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F5 Words in s. 105(2) inserted (with effect in accordance with s. 90(7) of the amending Act) by Finance Act 1995 (c. 4), s. 90(6)

F6 Words in s. 105(3) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 84(3) (with Sch. 2)

F7 S. 105(4) repealed (with application in accordance with Sch. 27 Pt. 3(6) Note of the repealing Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. 3(6)

Modifications etc. (not altering text)

C1 S. 105 modified by Capital Allowances Act 1990 (c. 1), s. 15A (as inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 201, Sch. 39 para. 1(2))

Marginal Citations

M1 Source—1970 s.145