»Ê¹ÚÌåÓýapp

CTA09/S1219

»Ê¹ÚÌåÓýapp legislation in respect of management expenses has a long history. »Ê¹ÚÌåÓýapp decided cases do not provide ready answers, but they do give some guidance as to what constitutes an expense of management. »Ê¹ÚÌåÓýappse apply for all periods both before and after 1 April 2004 legislative changes.

As a general rule, expenses will be allowable only if they are referable to managing the company’s investment business and not merely expenses arising from management. In Capital and National Trust Ltd v Golder 31TC at page 273, Tucker LJ said What we are concerned with here is the expenses of management, not expenses incurred by the management in carrying out the proper business of the company.

»Ê¹ÚÌåÓýapp requirement that expenses must be incurred in managing the investment business is now spelt out in the new legislation at CTA09/S1219(1) and (2)(a). »Ê¹ÚÌåÓýapp legislation also introduces an unallowable purpose test, see CTM08210.

»Ê¹ÚÌåÓýappre is no wholly and exclusively requirement for Section 1219 as discussed in CTM08170 and, for periods up to 31 March 2004, capital expenditure could be an expense of management if it otherwise met the relevant criteria.

»Ê¹ÚÌåÓýappre is a general exclusion of expenses that are otherwise deductible in computing profits, S1219(3)(b).

Do not allow as an expense of management a payment that is deductible against total profits as a charge on income (see CTM09000 onwards for details of charges).

»Ê¹ÚÌåÓýapp main points from cases on management expenses are discussed at CTM08160.