Corporation Tax Act 2009 section 985

References to a deduction being allowed to a company

Section 985 explains how a deduction allowed under the intellectual property Chapter is given effect for different types of company, depending on whether the company carries on a trade, a property business, an investment business, or life assurance business.

• For trading companies or property businesses, the deduction is made in calculating the profits of the trade or property business for corporation tax purposes.
• For companies with investment business (but not property businesses), the deduction is instead treated as expenses of management of the company.
• For life insurance companies subject to the I minus E rules, where expenses are referable to basic life assurance and general annuity business (BLAGAB), the deduction is treated as ordinary BLAGAB management expenses.
• The deduction is allowed even where it would otherwise be denied as capital expenditure under the normal trading income rules.