Corporation Tax Act 2010 section 881

Manner of apportionment

Section 881 sets out how disputes about the apportionment of payments or sums under the sale and lease-back rules are to be resolved when the apportionment affects the tax liabilities of two or more persons.

• When a payment or sum must be apportioned under section 880 (or section 681DJ of ITA 2007) and that apportionment is relevant to the tax liabilities of two or more persons ("the set"), a question may arise about how the apportionment should be carried out.
• If the apportionment is material to the corporation tax liability of one or more persons in the set, the question of how the payment or sum is divided is determined in the same way as an appeal — that is, by the tax tribunal.
• All persons in the set — not just those whose corporation tax is directly affected — have the right to be a party to the tribunal proceedings.
• This ensures that everyone whose tax position could be affected by the apportionment has an opportunity to present their case before a determination is made.