Income Tax (Trading and Other Income) Act 2005 section 147

Expenditure and receipts treated as revenue in nature

Section 147 ensures that the tax treatment of expenditure on acquiring, and receipts from disposing of, relevant telecommunication rights follows the accounting treatment, with such amounts being treated as revenue in nature for income tax purposes.

• Where expenditure on acquiring or receipts from disposing of a relevant telecommunication right are recognised in the profit or loss accounts under generally accepted accounting practice, they are treated as revenue items for income tax purposes
• Acquiring a telecommunication right includes extending the rights attached to it, or cancelling or restricting a derivative right to which it is subject
• Disposing of a telecommunication right includes cancelling or restricting the rights attached to it, or granting or extending a derivative right
• The rule follows the accounting treatment, so for acquisition costs the amount recognised will typically be an amortisation charge rather than the full upfront cost