Corporation Tax Act 2009 section 51

Relationship between rules prohibiting and allowing deductions

Section 51 establishes the priority rules that apply when a provision allowing a tax deduction conflicts with a provision that prohibits or restricts a deduction, and removes that priority where the deduction arises from tax avoidance arrangements.

• Rules that specifically allow deductions for trade profits generally take priority over rules that prohibit, defer or restrict those deductions.
• This priority does not apply where the deduction arises directly or indirectly from arrangements whose main purpose (or one of whose main purposes) is to obtain a tax advantage.
• Regardless of priority, certain prohibitive rules always prevail: those relating to car hire, unpaid remuneration, employee benefit contributions and crime-related payments.
• The permissive rules covered are those in Chapter 5 (excluding sections 62 to 67), Chapter 7 (gifts to charities), Chapter 9 (specific trades) and Chapter 12 (unremittable amounts).