Corporation Tax Act 2009 section 852

Treatment of grants and other contributions to expenditure

Section 852 explains how grants and other contributions received towards spending on intangible fixed assets are brought into account for corporation tax purposes.

• Where a grant or payment is intended to cover a company's expenditure on an intangible fixed asset, any resulting gain in the profit and loss account is treated as a taxable receipt relating to that asset.
• The gain is treated under the rules for receipts recognised as they accrue, meaning it is taxed in the same way as other income from intangible fixed assets.
• The term "gain recognised in the profit and loss account" covers amounts shown separately as income and amounts netted off against expenditure.
• Grants that fall within section 853 (grants to be left out of account for tax purposes) are excluded from this treatment.