Taxes Consolidation Act 1997 section 243A

Restriction of relevant charges on income

Section 243A restricts the deduction of trading charges on income incurred by a company in an activity taxable at the standard rate of corporation tax, ensuring such charges can only be offset against income also taxable at the standard rate.

• Relevant trading charges are charges on income paid wholly and exclusively for the purposes of a trade taxable at the standard corporation tax rate, excluding charges relating to an excepted trade taxable at 25%.
• These charges cannot be deducted against the company's total profits under the normal rules in section 243; instead, they are ringfenced and may only be offset against income taxable at the standard rate.
• Permitted offsets include relevant trading income (trading income not taxable at 25%), income from certain life, non-life insurance and reinsurance trades, and foreign dividends taxable at the standard rate.
• Where relevant trading charges cannot be offset against trading income, they may be offset against non-trading income on a value basis under section 243B, by reducing the corporation tax liability by the amount of the charges multiplied by the standard corporation tax rate of 12.5%.