Section 317 — Corporation Tax Act 2010: Reduction in respect of disposal receipts under CAA 2001

Reduction in respect of disposal receipts under CAA 2001 317 1 This section applies in the case of the qualifying company if—

a it incurs qualifying pre-commencement expenditure in respect of a ring fence trade in any pre-commencement period, b it would, on the relevant assumption, be entitled to an allowance under any provision of CAA 2001 in respect of that expenditure, c an event occurs in relation to any asset representing the expenditure in any pre-commencement period, and d the event would, on the relevant assumption, require a disposal value (the “deductible amount”) to be brought into account under any provision of CAA 2001 for any pre-commencement period.

2 The relevant assumption is that the company was carrying on the ring fence trade—

a when the expenditure was incurred, and b when the event giving rise to the disposal value occurred.

3 For the purpose of allocating qualifying pre-commencement expenditure to the pool for each pre-commencement period—

a find the total amount of the disposal values in the case of all such events (amount D),

and b taking later periods before earlier periods, reduce (but not below nil) amount E for any pre-commencement period by setting against it so much of amount D as does not fall to be set against amount E for a later pre-commencement period.

4 This section is subject to section 318A(5) (exclusion of deductible amounts in respect of pre-2013 expenditure when determining pre-commencement supplement for additional 4 periods).