Corporation Tax Act 2009 section 1244A

Contributions to flood and coastal erosion risk management projects

Section 1244A allows companies with investment business to treat the cost of qualifying contributions to qualifying flood or coastal erosion risk management projects as deductible management expenses, subject to conditions around disqualifying benefits.

• Expenses incurred by a company with investment business in making a qualifying contribution to a qualifying flood or coastal erosion risk management project are treated as management expenses
• The deduction is denied if the contributor or a connected person receives, or is entitled to receive, a disqualifying benefit in connection with the contribution, regardless of who provides the benefit or whether it arises from the project
• A disqualifying benefit is any benefit of money or other property, but excludes refunds of cash contributions, compensation for contributed services, and flood defence structures, additions, land, plant, machinery or land rights used for flood or coastal erosion risk management purposes within the project
• The definitions of qualifying contribution, qualifying project and other interpretive provisions that apply to the equivalent trading deduction under section 86A also apply here, by virtue of the cross-application of section 86B