Corporation Tax Act 2010 section 799

Manufactured payments under arrangements with unallowable purpose

Section 799 denies tax relief for manufactured payments made under arrangements that have an unallowable purpose, and sets out how any disallowance is calculated.

• Where a company makes a manufactured payment under arrangements with an unallowable purpose, tax relief for that payment may be restricted or denied entirely.
• The section only applies if the arrangements are not already caught by another relevant tax relief restriction, acting as a backstop provision.
• Where only part of the manufactured payment is attributable to the unallowable purpose, a just and reasonable apportionment must be made, and only the portion linked to the unallowable purpose is denied relief.
• Relevant tax relief includes any deduction or allowance that would otherwise be available to the company in computing its corporation tax liability in respect of the manufactured payment.

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