Section 114 | Consideration for options: corporation tax.

From legislation.gov.uk

(A1)This section has effect for the purposes of corporation tax.^F1

(1)If, in a case where section 110(8)(b) applies, the increase in the qualifying expenditure is, in whole or in part, attributable to the cost of acquiring an option binding the grantor to sell (“the option consideration”), then, in addition to any increase under section 110(8)(a) or (b), the indexed pool of expenditure shall be increased by an amount equal to the indexed rise in the option consideration, as determined under subsection (2) below.

(2)The indexed rise in the option consideration is a sum produced by multiplying the consideration by a figure expressed as a decimal and determined, subject to subsection (3) below, by the formula—^F2

Formula

\frac{RO - RA}{RA}

where—

RO is the retail prices index for December 2017; and

RA is the retail prices index for the month in which falls the date in which the option was acquired or, if it is later, March 1982.

(3)The indexed rise is nil if—^F3

(a)RO, as defined in subsection (2), is equal to or less than RA, as so defined, or^F3

(b)the month referred to in the definition of RA in subsection (2) is after December 2017.^F3