Corporation Tax Act 2010 section 318A

Adjustment of pool to remove pre-2013 expenditure after the initial 6 periods

Section 318A explains how the mixed pool of qualifying pre-commencement expenditure is adjusted to strip out expenditure and supplement relating to periods before 5 December 2013, so that only post-2013 amounts remain eligible for the additional four periods of ring fence expenditure supplement.

• After a company's initial six supplement claims (or 5 December 2013 if later), the mixed pool is reduced by removing any amounts carried forward under the old ICTA rules, plus all qualifying pre-commencement expenditure and pre-commencement supplement allocated for periods beginning before 5 December 2013.
• When calculating the pool for the additional four claims, any reduction for disposal receipts under section 317 ignores disposals relating to assets where the original expenditure was incurred before 5 December 2013.
• If an accounting period straddles 5 December 2013, it is split into two notional periods — one before and one from that date — and expenditure and supplement are apportioned between them in proportion to the number of days in each.
• If a time-based apportionment produces an unjust or unreasonable result, the company may elect to use a different basis provided it is just and reasonable and is specified in the election.