HMRC internal manual

Company Taxation Manual

Corporation Tax: management expenses: introduction

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

CTA2009/Part 16

In 1915 new legislation provided investment companies and certain life insurance companies with tax relief for management expenses.  The aim of the legislation was to put investment companies into a broadly similar position to trading companies.  The statutory provisions remained essentially unchanged until 2004.

Changes have affected the following broad areas:

  • To be eligible for relief for expenses of management, a company must be a ‘company with investment business’, as defined in CTA09/S1218B
  • The number of companies qualifying for relief for management expenses is now more extensive as the definition is less restrictive
  • The statutory test states that relief is given for expenses of management of the investment business
  • There is a specific exclusion for capital expenditure, CTA09/S1219(3)(b)
  •  There is no relief where assets are held for an unallowable purpose CTA09/S1219(2)(b) and S1220
  • There is an anti-avoidance rule (TAAR), CTA09/S1248
  • The timing of the  relief broadly follows the accounts, CTA09/S1224
  • Where a company receives a credit for sums that have previously been allowed as management expenses, that credit can be charged to CT, CTA09/S1229
  • Relief for the management expenses of insurance companies has been completely decoupled from that for other companies with investment business and is now to be found in Part 2, Chapter 1 FA12.


The legislation was rewritten and consolidated in CTA09. The guidance which follows covers only the new legislation from 2004 in its rewritten form. Copies of previous guidance covering the pre-2004 legislation (and the application of the transitional provisions) can be obtained from the editor along with details of the legislative references from 2004 to 2009 if required.