Part 11U.K. Contributions

Chapter 1U.K. Exclusion of expenditure met by contributions

Exceptions to the general rule excluding contributionsU.K.

536 Contributions not made by public bodies and not eligible for tax reliefU.K.

(1)A person (“R”) is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that the requirements in subsections (2) and (3) are satisfied in relation to the expenditure [F1(but see subsection (6))].

(2)The first requirement is that the person meeting R’s expenditure (“C”) is not a public body.

(3)The second requirement is that—

(a)no allowance can be made under Chapter 2 in respect of C’s expenditure, and

(b)the expenditure is not allowed to be deducted in calculating the profits of a trade or relevant activity carried on by C.

(4)When determining for the purposes of subsection (3)(a) whether an allowance can be made under Chapter 2, assume that C is within the charge to tax.

(5)In subsection (3)(b) “relevant activity” means—

(a)for the purposes of Part 2—

(i)an ordinary [F2UK] [F3property] business;

(ii)a [F4UK furnished] holiday lettings business;

(iii)an [F5ordinary overseas] property business;

[F6(iiia)an EEA furnished holiday lettings business;]

(iv)a profession or vocation;

(v)any concern listed in [F7section 12(4) of ITTOIA 2005 or] [F8section 39(5) of CTA 2009] (mines, transport undertakings etc.);

(vi)the management of an investment company;

(b)for other purposes, a profession or vocation.

[F9(6)Subsection (1) does not apply for the purposes of Part 2A (structures and buildings allowances).]