Corporation Tax Act 2009 section 214

Relationship between rules prohibiting and allowing deductions

Section 214 determines how to resolve conflicts between rules that allow deductions and rules that prohibit deductions when calculating the profits of a property business.

• Where a rule in Part 4 allows a deduction and another rule prohibits it, the permissive rule generally takes priority over the prohibitive rule.
• Four specific restrictions always override any permissive rule: car hire costs, unpaid remuneration, employee benefit contributions, and crime-related payments.
• If a deduction arises from tax avoidance arrangements, the normal priority is reversed and any prohibitive rule will prevail over the permissive rule.
• These priority rules extend to the trading income provisions that apply to property businesses indirectly through section 210.