Taxation of Chargeable Gains Act 1992 section 113

Calls on shares: corporation tax

Section 113 deals with how the indexation allowance is calculated for corporation tax purposes when partly paid shares are paid up in instalments, particularly where payments are made more than 12 months after the shares were issued.

• This section applies only for corporation tax purposes, effective from 6 April 2008, and concerns partly paid shares, securities or debentures where the consideration is paid in stages.
• Where any part of the consideration for shares is paid more than 12 months after the date of issue, that later payment must be treated as a separate item of expenditure for indexation allowance purposes.
• The indexation allowance on the late payment runs from the date the payment was actually made, not from the date the shares were originally issued.
• The normal rule in section 54(4), which would otherwise deem the expenditure to have been incurred at an earlier date, does not apply to these late payments.