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HMRC internal manual

Company Taxation Manual

Corporation Tax: accounting periods: commencement - special cases

CTA09/S9 (2) (formerly ICTA88/S12 (4))

An investment company’s only income may be dividends from other UK companies. Such dividends are excluded from the charge to CT by CTA09/PART9A, and formerly by ICTA88/S208 and CTA09/S1285. But the effect of CTA09/S9 (2), formerly ICTA88/S12 (4), is that the company is treated as coming within the charge to CT at the time it starts to carry on business. It starts business on the date when it first holds shares in another non-dormant company, and its first accounting period starts on that date. These provisions allow it to claim management expenses under CTA09/S1219, formerly ICTA88/S75, see CTM08000 onwards.

CTA09/S9(3) (formerly ICTA88/S12 (6))

This provides that where:

  • a chargeable gain or allowable loss accrues to a company before it has come within the charge to CT in respect of any source of income, and
  • the company has not started to ‘carry on business’ within the meaning of CTA09/S9(2) (formerly ICTA88/S12 (4))

an accounting period of the company begins at the time of the gain or loss. The gain or loss accrues in that accounting period. The end of the accounting period is determined by the rules in CTM01500.