(1)This section defines what payments or other amounts are “charges on income” for the purposes of corporation tax.
This section has effect subject to any express exceptions in the Corporation Tax Acts.
(2)Subject to the following provisions of this section, the following (and only the following) are charges on income—
(a)annuities or other annual payments that meet the conditions specified in section 338B;
(b)qualifying donations within the meaning of section 339 (qualifying donations to charity);
(c)amounts allowed as charges on income under section 587B(2)(a)(ii) (gifts of shares etc to charity).
(3)No payment that is deductible in computing profits or any description of profits for the purposes of corporation tax shall be treated as a charge on income.
(4)No payment shall be treated as a charge on income if (without being so deductible) it is—
(a)an annuity payable by an insurance company, or
(b)an annuity or other annual payment payable by a company wholly or partly in satisfaction of any claim under an insurance policy in relation to which the company is the insurer.
In paragraph (a) “insurance company” has the same meaning as in Chapter 1 of Part 12.