Section 82 — Corporation Tax Act 2009: Contributions to local enterprise organisations or urban regeneration companies

Contributions to local enterprise organisations or urban regeneration companies 82 1 This section applies if a company carrying on a trade (“ the contributor ”) incurs expenses in making a contribution (whether in cash or in kind)—

a to a local enterprise organisation (see section 83), or b to an urban regeneration company (see section 86), and a deduction would not otherwise be allowable for the expenses in calculating the profits of the trade.

2 In calculating the profits of the trade, a deduction is allowed under this section for the expenses.

3 But if, in connection with the making of the contribution, the contributor or a connected person—

a receives a disqualifying benefit of any kind, or b is entitled to receive such a benefit, the amount of the deduction is restricted to the amount of the expenses less the value of the benefit.

4 For this purpose it does not matter whether a person receives, or is entitled to receive, the benefit—

a from the local enterprise organisation or urban regeneration company concerned, or b from anyone else.

5 Subsection (6) applies if—

a a deduction has been made under this section, and b the contributor or a connected person receives a disqualifying benefit that is in any way attributable to the contribution.

6 An amount equal to the value of the benefit (so far as not brought into account in determining the amount of the deduction)—

a is brought into account in calculating the profits of the trade, as a receipt arising in the accounting period in which the benefit is received, or b if the contributor has permanently ceased to carry on the trade before the benefit is received, is treated as a post-cessation receipt (see Chapter 15).

7 In this section “ disqualifying benefit ” means a benefit the expenses of obtaining which, if incurred by the contributor directly in a transaction at arm's length, would not be allowable as a deduction in calculating the profits of the trade.