Income Tax Act 2007 section 614ZC

Treatment of payer of manufactured payment

Section 614ZC sets out how income tax treats a person who makes a manufactured payment under a manufactured payment relationship, including when a deduction for such a payment is or is not allowed.

• Where a person pays (or has paid on their behalf) a manufactured payment under a manufactured payment relationship, no deduction for that payment is generally allowed when calculating their profits or other income for income tax purposes.
• An exception applies where the manufactured payment is already brought into account under Part 2 of ITTOIA 2005 in calculating the profits of a trade carried on by that person.
• Even where the trade profits exception applies, it does not affect the question of whether a deduction would otherwise be allowable under separate rules governing trading profit deductions.
• The restriction on deductions covers all types of income, not just trading income, unless the specific trade profits exception is met.