Corporation Tax Act 2009 section 54

Expenses not wholly and exclusively for trade and unconnected losses

Section 54 sets out the rules preventing deductions for expenses that are not wholly and exclusively for trade purposes, and for losses unconnected with the trade, while allowing apportionment of mixed-purpose expenses.

• No deduction is allowed for expenses not incurred wholly and exclusively for the purposes of the trade
• No deduction is allowed for losses that are not connected with or arising out of the trade
• Where an expense serves more than one purpose, an identifiable part or proportion that is wholly and exclusively for the trade may still be deducted
• Apportionment is only possible where a distinct trade element of the expense can be identified; if it cannot, no deduction is available at all