Income and Corporation Taxes Act 1988

74 General rules as to deductions not allowable. U.K.

[F1 (1)] M1 Subject to the provisions of [F2 the Corporation Tax Acts], in computing the amount of the [F3 profits] to be charged [F4 to corporation tax] under Case I or Case II of Schedule D, no sum shall be deducted in respect of—

(a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade [F5 or profession];

(b) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) the rent of the whole or any part of any dwelling-house or domestic offices, except any such part as is used for the purposes of the trade [F5 or profession], and where any such part is so used, the sum so deducted shall not, unless in any particular case it appears that having regard to all the circumstances some greater sum ought to be deducted, exceed two-thirds of the rent bona fide paid for that dwelling-house or those offices;

(d) any sum expended for repairs of premises occupied, or for the supply, repairs or alterations of any implements, utensils or articles employed, for the purposes of the trade [F5 or profession], beyond the sum actually expended for those purposes;

(e) any loss not connected with or arising out of the trade [F5 or profession];

(f) any capital withdrawn from, or any sum employed or intended to be employed as capital in, the trade [F5 or profession], but so that this paragraph shall not be treated as disallowing the deduction of any interest;

(g) any capital employed in improvements of premises occupied for the purposes of the trade [F5 or profession];

(h) any interest which might have been made if any such sums as aforesaid had been laid out at interest;

[F7 (j) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(k) any average loss beyond the actual amount of loss after adjustment;

(l) any sum recoverable under an insurance or contract of indemnity;

(m) any annuity or other annual payment (other than interest) payable out of the [F9 profits];

(n) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F11 (o) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(p) M2 any royalty or other sum paid in respect of the user of a patent;

(q) F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F13 (2) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F1 S. 74 renumbered as s. 74(1) (3.5.1994) by virtue of Finance Act 1994 (c. 9), s. 144(2)

F2 Words in s. 74(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. 45(a) (with Sch. 2)

F3 Words in s. 74(1) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F4 Words in s. 74(1) inserted (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. 45(b) (with Sch. 2)

F5 Words in s. 74(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. 45(c) (with Sch. 2)

F6 S. 74(1)(b)(o) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 45(d)(f), Sch. 3 (with Sch. 2)

F7 S. 74(1)(j) substituted (with effect in accordance with s. 144(6) of the amending Act) by Finance Act 1994 (c. 9), s. 144(1)

F8 S. 74(1)(j) repealed (with effect in accordance with s. 80(3)(4) of the repealing Act) by Finance Act 2005 (c. 7), Sch. 4 para. 1, Sch. 11 Pt. 2(5), Note

F9 Words in s. 74(1)(m) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F10 S. 74(1)(n) repealed (with effect in accordance with s. 37 of the repealing Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(2), Note

F11 S. 74(1)(o) substituted (with effect in accordance with s. 81(6) of the amending Act) by Finance Act 1994 (c. 9), Sch. 9 para. 1

F12 S. 74(1)(q) repealed (with effect in accordance with Sch. 18 Pt. 6(2) Note of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(2)

F13 S. 74(2) inserted (3.5.1994) by Finance Act 1994 (c. 9) {s. 144(2)}

F14 S. 74(2) repealed (with effect in accordance with s. 80(3)(4) of the repealing Act) by Finance Act 2005 (c. 7), Sch. 4 para. 1, Sch. 11 Pt. 2(5), Note

Modifications etc. (not altering text)

C1 S. 74 excluded (3.5.1994) by Finance Act 1994 (c. 9), s. 159(4) (with Sch. 18 paras. 1(3), 2(3)(4), 3(3))

C2 S. 74 excluded (with effect in accordance with s. 105(1) of the excluding Act) by Finance Act 1996 (c. 8), s. 82(7) (with ss. 98, 99, Schs. 10, 11, 15)

C3 S. 74 excluded (with effect in accordance with s. 83(3) of the excluding Act) by Finance Act 2002 (c. 23), Sch. 26 Para. 14(4) (with Sch. 28)

C4 See 1989 ss.112-113—expenditure on security on or after 6April 1989.

C5 S. 74(1)(a) extended (1.1.1999) by The European Single Currency (Taxes) Regulations 1998 (S.I. 1998/3177), regs. 1, 5

C6 S. 74(1)(m)(p) restricted (with effect in accordance with Sch. 29 Pt. 14 of the affecting Act) by Finance Act 2002 (c. 23), Sch. 29 para. 8(3) (with Sch. 29 para. 8(4))

Marginal Citations

M1 SOURCE-1970 s. 130(a)–(m); 1987 Sch. 15para. 2(9)

M2 SOURCE-1970 s. 130(n), (o)