Corporation Tax Act 2009 section 1253

Contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits

Section 1253 deals with the tax consequences when a company (or a connected person) receives a disqualifying benefit linked to a contribution to a local enterprise organisation or urban regeneration company for which a management expenses deduction has been claimed.

• Where a company has claimed a management expenses deduction for a contribution to a local enterprise organisation or urban regeneration company, any disqualifying benefit received by the contributor or a connected person triggers a tax charge.
• The contributor is treated as receiving a taxable amount equal to the value of the disqualifying benefit, to the extent that value has not already been taken into account in calculating the original deduction.
• The taxable amount is subject to corporation tax on income and is treated as arising at the time the benefit is received.
• A "disqualifying benefit" has the same meaning as defined in section 1244, which governs the original deduction for such contributions.