Section 357BLC — Corporation Tax Act 2010: Qualifying expenditure on relevant R&D sub-contracted to unconnected persons

Qualifying expenditure on relevant R&D sub-contracted to unconnected persons 357BLC 1 In section 357BLA, the company's “ qualifying expenditure on relevant R&D sub-contracted to unconnected persons ” means the expenditure incurred by the company during the relevant period in making payments within subsection (2).

2 A payment is within this subsection if—

a it is made to a person in respect of relevant research and development contracted out by the company to the person, and b the company and the person are not connected (within the meaning given by section 1122).

3 If an election made by the company under section 18A of CTA 2009 (election for exemption for profits or losses of company's foreign permanent establishments) applies to the relevant period, expenditure incurred by the company during the period in making payments within subsection (2)—

a is not “qualifying expenditure on relevant R&D sub-contracted to unconnected persons”, but b is “qualifying expenditure on relevant R&D sub-contracted to connected persons”, so far as it is expenditure brought into account in calculating a relevant profits amount, or a relevant losses amount, aggregated at section 18A(4)(a) or (b) of CTA 2009 in calculating the company's foreign permanent establishments amount for the period.

4 Where a payment is made to a person in respect of relevant research and development contracted out to the person and in respect of other matters, so much of the payment as is properly attributable to other matters is to be disregarded for the purposes of this section.