Corporation Tax Act 2010 section 317

Reduction in respect of disposal receipts under CAA 2001

Section 317 reduces the amount of pre-commencement expenditure eligible for ring fence expenditure supplement where the company has received disposal proceeds on assets acquired before the trade began.

• Where a company incurs qualifying expenditure before starting a ring fence trade and an asset representing that expenditure is disposed of (or another relevant event occurs) during the pre-commencement period, a disposal value must be taken into account.
• The section assumes the company was already carrying on the ring fence trade both when the expenditure was incurred and when the disposal event occurred, so that Capital Allowances Act 2001 provisions can be applied hypothetically.
• Total disposal values (amount D) are set against the qualifying expenditure in each pre-commencement period (amount E), working backwards from later periods to earlier ones, reducing each period's expenditure but never below nil.
• This section is subject to section 318A(5), which excludes deductible amounts relating to pre-2013 expenditure when calculating supplement for the additional four-period window.