Corporation Tax Act 2010 section 682

Restriction on the deduction of expenses of management

Section 682 restricts the deduction of management expenses and capital allowances for investment companies where there has been a change in company ownership.

• Where a change of ownership triggers the rules in this Chapter, the actual accounting period is split into two notional periods (before and after the change), and management expenses are apportioned between them
• Expenses and allowances apportioned to a notional accounting period are treated as belonging to that notional period for the purposes of the investment company management expenses and capital allowances rules
• After the change of ownership, the company cannot carry forward and deduct management expenses or capital allowances that related to any accounting period beginning before the change
• The effect is to prevent a new owner from benefiting from the previous owner's unrelieved management expenses or excess capital allowances