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HMRC internal manual

Company Taxation Manual

Transfer of Deductions – Highly Likely Disallowed Deductions

CTA10/S730B; CTA10/S730C (6); CTA10/S730D (4)


A deductible amount which would be disallowed for the purposes of these transfer of deduction rules includes:

  • an expense of a trade
  • an expense of a property business
  • an expense of management of a company’s investment business within the meaning of section 1219 of CTA 2009
  • a non-trading debit within the meaning of Parts 5 and 6 of CTA 2009 (loan relationships and derivative contracts); and
  • a non-trading debit within the meaning of Part 8 of CTA 2009 (intangible fixed assets).


But does not include:

  • Any amount which has been taken into account in determining the “relevant tax written down value” within the meaning of CAA01/Part 2/Chapter 16A (CA27850); or
  • If the relevant day is on or after 1 April 2014, an amount treated as an expense of the trade by being a research and development expense by virtue of CAA01/S450(a) (CA60000)  


    Highly Likely


    When determining if a deduction is highly likely, factors to take into account include any relevant arrangements made on or before the relevant day, any relevant events on or before that day.