Part 13... expenditure on research and development
Chapter 9Supplementary
Miscellaneous
F11138AExternally provided workers and contractors: R&D undertaken abroad
(1)
This section applies to research and development undertaken outside the United Kingdom if—
(a)
the research and development is undertaken in the circumstances described in subsection (2), or
(b)
regulations made by the Treasury provide for this section to apply.
(2)
The circumstances are that there are conditions necessary for the purposes of the research and development—
(a)
that are not present in the United Kingdom,
(b)
that are present in the location in which the research and development is undertaken, and
(c)
that it would be wholly unreasonable for the company to replicate in the United Kingdom.
(3)
In subsection (2) “conditions”—
(a)
includes—
(i)
geographical, environmental or social conditions;
(ii)
legal or regulatory requirements as a result of which the research and development may not be undertaken in the United Kingdom, but
(b)
does not include conditions so far as relating to—
(i)
the cost of the research and development;
(ii)
the availability of workers to carry out the research and development.
(4)
The Treasury may by regulations make provision specifying things that are not conditions for the purposes of subsection (2).