Corporation Tax Act 2009 section 1179BD

Preliminary expenditure

Section 1179BD allows a qualifying company to treat development expenditure incurred before the separate production trade formally began as expenditure of that trade.

• Applies where a qualifying company spent money developing a qualifying production before the separate production trade commenced.
• Such preliminary expenditure may be treated as if it were expenditure of the separate production trade, incurred immediately after the trade began.
• This means early development costs can qualify for relief within the production trade rather than being stranded outside it.
• If any of this re-allocated expenditure has already been used for other tax purposes, the relevant company tax return must be amended to reverse that earlier treatment.