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HMRC internal manual

Business Income Manual

Specific deductions: Flood and erosion projects: Disqualifying benefits

S86A (4), (5) and (8) Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)

S86A (4), (5) and (8) Corporation Tax Act 2009 (CTA 2009)

 

If, in connection with the making of a contribution, the contributor or a connected person either receives a disqualifying benefit or is entitled to receive such a benefit, then no deduction is allowed. This is so whether or not the benefit is received or is entitled to be received from the carrying out of the project. It also does not matter from whom the benefit is received, or is entitled to be received.

 

A disqualifying benefit means a benefit consisting of money or other property, but it does not include a refund of the contribution (if the contribution is a sum of money) or compensation for the contribution (if the contribution is the provision of services).

 

In addition, the following are not disqualifying benefits:

  • A structure that is or is to be used for the purposes of flood or coastal erosion risk management and is put in place in carrying out the project. A structure includes road, path, pipe, earthwork, plant and machinery.
  • An addition to a structure where the structure is or is to be used for the purposes of flood or coastal erosion risk management and the addition is made in carrying out the project.
  • Land, plant or machinery that is or is to be used in the realization of the project, for the purposes of flood or coastal erosion risk management.
  • A right over land that is or is to be used in the realization of the project, for the purposes of flood or coastal erosion risk management.