Corporation Tax Act 2010 section 1160

Calculation of income

Section 1160 explains how to calculate a company's income for the purposes of conditions C and D of the investment trust rules, and what amounts should be included or excluded from that calculation.

• Income for conditions C and D is calculated using tax-based principles, meaning it follows the framework of tax language rather than a general commercial meaning of income.
• Rules are provided for determining both the total amount of a company's income and the amount of income derived specifically from shares or securities.
• Additional provisions address how certain items are to be treated when calculating income, including specific rules that apply to condition C (relating to the retention of income) and condition D.
• These calculation rules also feed into the connected requirement in section 1161(2)(a), which deals with distribution of income by investment trusts.