Finance Act, 1986

Taxation of a qualifying research and development company.

24.—The carrying out of a qualifying research and development project by a qualifying research and development company shall be deemed, for all the purposes of the Tax Acts other than the purposes of section 22 , to be the carrying on of a trade (hereafter in this section referred to as “the manufacturing trade”), separate from any other trade which the company may at any time carry on, which consists wholly of the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 , and, notwithstanding anything to the contrary in the Tax Acts or elsewhere—

(a) any amount expended by the company in the course of the carrying out of a qualifying research and development project and for which an allowance, relief or deduction would not otherwise be available, directly or indirectly, under the Tax Acts on the basis that the carrying out of the qualifying research and development project is the carrying on of a trade, shall be deemed to be an amount expended for the purposes of the manufacturing trade, and

(b) any amount received by the company, no matter in what form and no matter how described, by reason of the carrying out of, or in consequence of the carrying out of, or otherwise in connection with the carrying out of, the qualifying research and development project shall be deemed to be a trading receipt of the manufacturing trade for the accounting period in which it is received,

and the manufacturing trade shall be deemed to be carried on by the company so long as it is entitled to receive any amount referred to in paragraph (b).