Restrictions are placed on the deductions below by CTA 2009, s. 1301–1305.

Deductions for annual payments

A deduction is not allowed for an annual payment which satisfies the following conditions (s. 1301(1)–(3)):

(1)it must be chargeable to corporation tax under CTA 2009, Pt. 10, Ch. 7 (see ¶702-150) or income tax under ITTOIA 2005, Pt. 5 otherwise than as relevant foreign income; and

(2)it must be made under a liability incurred for a consideration, some or all of which, consists of:

(a)a dividend or the right to receive a dividend; or

(b)an amount which is not liable to be included in the payer’s income for corporation tax purposes.

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