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Legislation
Corporation Tax Act 2010

Crossheading Qualifying payments

  • Section 191 Qualifying payments
  • Section 192 Condition as to repayment
  • Section 193 Associated acquisition etc
  • Section 194 Distributions
  • Section 195 Associated benefits
  • Section 196 Associated benefits: meaning
  • Section 197 Restrictions on associated benefits
  • Section 198 Payments and benefits linked to periods of less than 12 months
  1. Qualifying payments
  2. Payments and benefits linked to periods of less than 12 months

Section 198 | Payments and benefits linked to periods of less than 12 months

From legislation.gov.uk

(1)This section modifies the application of section 197(2) in relation to a payment if condition A, B, C or D is met.

(2)Condition A is that a benefit associated with the payment relates to a period of less than 12 months.

(3)Condition B is that a benefit associated with the payment consists of a right to receive benefits at intervals over a period of less than 12 months.

(4)Condition C is that a benefit associated with the payment is one of a series of benefits which are—

(a)received at intervals, and

(b)associated with a series of payments made at intervals of less than 12 months.

(5)Condition D is that—

(a)a benefit associated with the payment is not one of a series of benefits received at intervals, and

(b)the payment is one of a series of payments made at intervals of less than 12 months.

(6)If condition A, B or C is met, then for the purposes of section 197(2)—

(a)the value of the benefit is taken to be the annual equivalent of its actual value, and

(b)the amount of the payment is taken to be the annual equivalent of its actual amount.

(7)If condition D is met, the amount of the payment is taken for the purposes of section 197(2) to be the annual equivalent of its actual amount.

(8)The annual equivalent of the value of a benefit, or of the amount of a payment, is found as follows.

Step 1Multiply the value or amount by 365.

Step 2If condition A or B is met in relation to the benefit (and neither condition C nor condition D is met in relation to it) divide the result by the number of days in the period of less than 12 months referred to in subsection (2) or (as the case may be) subsection (3).

If condition C or D is met in relation to the benefit, divide the result by the average number of days in the intervals of less than 12 months referred to in subsection (4)(b) or (as the case may be) subsection (5)(b).

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