Corporation Tax Act 2010 section 357YB

Restitution interest chargeable as income

Section 357YB establishes that restitution interest received by a company is chargeable to corporation tax as income under Part 8C, regardless of whether the underlying profits are income or capital in nature.

• Restitution interest received by a company is taxable as income under Part 8C of the Corporation Tax Act 2010, whether the profits are of an income or capital nature.
• Charitable companies are specifically excluded from this charge.
• The term "profits" in Part 8C is to be interpreted in accordance with section 2(2) of the Corporation Tax Act 2009.
• The effect is that restitution interest cannot escape the tax charge by being characterised as capital rather than income.