Corporation Tax Act 2009 section 149

Exclusion of expenditure met by subsidies

Section 149 restricts the capital expenditure deduction available under section 147 by excluding expenditure that has been funded by subsidies, grants, or third-party contributions, subject to certain exceptions.

• Capital expenditure funded directly or indirectly by the Crown, any government, public authority, or any other third party is generally excluded from the section 147 deduction
• Expenditure funded by insurance proceeds or other compensation for assets that have been destroyed, demolished, or put out of use remains eligible for the deduction
• Expenditure funded by certain grants made under Northern Ireland legislation, where the Treasury has declared these correspond to grants under Part 2 of the Industrial Development Act 1982, also remains eligible
• Expenditure met by a third party (other than the Crown, a government, or a public authority) is not excluded if that third party cannot itself claim a tax deduction for the payment in calculating its own trade profits