Section 516 — Corporation Tax Act 2010: Rules for attributing excess expenditure to earlier periods

Rules for attributing excess expenditure to earlier periods 516 1 The rules in this section apply for attributing a charitable company's excess expenditure for an accounting period to earlier accounting periods under section 515.

2 The excess expenditure for an accounting period may be attributed to an earlier accounting period if—

a the earlier period ends not more than 6 years before the end of the period in question, and b the charitable company's available income and gains for the earlier period exceed its non-charitable expenditure for the earlier period.

3 If the conditions in subsection (2) are met in the case of more than one earlier accounting period, the excess expenditure is to be attributed to a later accounting period in priority to an earlier accounting period.

4 The amount of excess expenditure that is to be attributed to an earlier accounting period must not be greater than the amount by which the charitable company's available income and gains for the earlier period exceed its non-charitable expenditure for the earlier period.

5 For the purposes of subsections (2)(b) and (4) the charitable company's non-charitable expenditure for the earlier accounting period includes any excess expenditure attributed to the earlier period as a result of a previous operation of this section, but ignores the attribution in question.