Finance Act, 1980

Treatment of certain deductions in relation to relevant distributions.

46.—(1) In this section “relevant deduction”, in relation to a relevant accounting period of a company, means any amount allowed as a deduction against the total profits of the company in that period in respect of—

(a) charges on income,

(b) group relief,

(c) any allowance in respect of capital expenditure to which effect is given for that period under section 14 (6) of the Corporation Tax Act, 1976 ,

(d) any loss in respect of which the profits of that period are treated as reduced under section 16 (2) of that Act, or

(e) other amounts which, under the Corporation Tax Acts, can be deducted from or set against or treated as reducing profits of more than one description.

(2) Where, for any relevant accounting period of a company—

(a) the corporation tax referable to the income of the company from the sale of goods falls to be reduced under section 41, and

(b) a relevant deduction has been allowed against the total profits in computing the corporation tax chargeable,

then, the amount of the company's income which falls to be taken into account in the definition of A or C in section 45 (1) in respect of that relevant accounting period shall be reduced by an amount equal to such part of the relevant deduction as bears to the whole the same proportion as the amount of the income of the company from the sale of goods bears to the total income brought into charge to corporation tax for the relevant accounting period.