Corporation Tax Act 2009 section 104V

Entitlement to credit: I minus E basis

Section 104V allows certain non-proprietary insurance companies that calculate their profits on an "I minus E" (income minus expenses) basis to claim R&D expenditure credits, even though they would not normally qualify under the standard rules.

• This section applies to insurance companies taxed under the I minus E rules that do not normally calculate a separate BLAGAB (basic life assurance and general annuity business) trade profit or loss.
• For the purpose of claiming R&D expenditure credits, these companies are treated as if they do calculate a BLAGAB trade profit or loss, bringing them within the scope of section 104A.
• Any receipts arising from the R&D expenditure credit are treated as though they are taken into account in calculating the company's BLAGAB trade profit or loss for the relevant period.
• The effect is that the R&D expenditure credit becomes a taxable receipt within the company's existing tax computation framework.