Finance (No. 2) Act 2017

7 (1) Section 240C (unrelieved qualifying expenditure) is amended as follows. U.K.

(2) For the heading substitute “ Unrelieved qualifying expenditure: Parts 2, 7 and 8 of CAA 2001 ”.

(3) In subsection (1)(b), after “unrelieved qualifying expenditure” insert “ relating to the trade ”.

(4) In subsection (3), for “the relevant portion of the expenditure” substitute “ any cash basis deductible amount of the expenditure ”.

(5) For subsection (4) substitute—

“(4) A “cash basis deductible amount” of the expenditure means any amount of the expenditure for which a deduction would be allowed in calculating the profits of the trade on the cash basis on the assumption that the expenditure was paid in the current tax year.”

(6) In subsection (5), for “The relevant portion” substitute “ Any cash basis deductible amount ”.

(7) After subsection (5) insert—

“(5A) For the purposes of subsection (1)(b), in determining the unrelieved qualifying expenditure the person has to carry forward, disregard sections 59(4), 461A(1) and 475A(1) of CAA 2001 (which provide that an amount is not to be carried forward as unrelieved qualifying expenditure when a person enters the cash basis).”

(8) For subsection (6) substitute—

“(6) In this section “unrelieved qualifying expenditure” means unrelieved qualifying expenditure for the purposes of—

(a) Part 2 of CAA 2001 (see section 59(1) and (2) of that Act),

(b) Part 7 of that Act (see section 461 of that Act), or

(c) Part 8 of that Act (see section 475 of that Act).”