Taxation (International and Other Provisions) Act 2010 section 52

General deductions

Section 52 allows a company to choose how to allocate general deductions across different types of profit when calculating the credit relief limit under section 42.

• Where a deduction (such as management expenses or charges on income) can be set against more than one type of profit, the company has flexibility in how it allocates that deduction.
• The company may split the deduction in whatever amounts and against whichever categories of profit it considers appropriate.
• This allocation matters because the credit relief limit under section 42 is calculated by reference to profits of particular descriptions, so how deductions are allocated affects the amount of double taxation credit relief available.
• This rule applies specifically for corporation tax purposes and gives the company full discretion over the allocation.