CTM08440 | Corporation Tax: management expenses: property business
From HM Revenue & Customs · Company Taxation Manual
and
Where a company with investment business also has a property business within the meaning of some part of the remunerationof employees and directors may refer to the management of the properties. That part should be deducted in the computation of the profits of the property business, and not as an expense of management under .
Officers should ensure, where there is a balance which is not deducted in the calculation of the profits of the property business, that excessive remuneration is not allowed as an expense of management () and that any unpaid remuneration is dealt with in accordance with and S1250 (). If there is a company with investment business and a property business, where there could be difficulty in agreeing the amount of admissible management expenses, a clear distinction should be drawn between:
those items which the company claims as deductions in the computation of the profits of its property business, and
the expenses incurred in managing its investment business which can be claimed as management expenses under .
The distinction is important because:
expenses otherwise deductible in the computation of total profits or deductible in calculating any component of total profits (which would include the calculation of the profits of a property business) cannot be deductible as management expenses under .