CIRD12660 | Core computational rules: deductible debits: general matters and adjustments for tax purposes: deferral of deduction: payment of royalties to related party delayed

CTA09/PART8/S851

This rule applies where a royalty:

• is payable by a company to or for the benefit of a ‘related party’ (see CIRD45105 onwards)

• is not paid within twelve months of the end of the period of account in which it is charged against profits

• is not at some time fully brought into account under Part 8 by the recipient

In those circumstances the royalty only counts as a deductible debit when it is actually paid. See CIRD11710 for the definition of royalties.

This rule is modelled on the similar provision in the loan relationships rules (CTA09/PART8/S373) concerned with late paid interest (see CFM35810).