Section 407 | Amounts not brought into account in determining a company's tax-EBITDA

(1)An amount is an excluded amount for the purposes of conditions A and B in section 406 if it is any of the following—

(a)a tax-interest expense amount or a tax-interest income amount (or an amount which would, apart from section 388, be a tax-interest income amount);

(b)an allowance or charge under CAA 2001 or capital expenditure for which a deduction is given under a relevant enactment;

(c)an excluded relevant intangibles debit or an excluded relevant intangibles credit (see section 408);

(d)a loss that—

(i)is made by the company in an accounting period other than that mentioned in section 406(2), and

(ii)is not an allowable loss for the purposes of TCGA 1992;

(e)a deficit from the company's loan relationships for an accounting period other than that mentioned in section 406(2);

(f)expenses of management of the company that are referable to an accounting period other than that mentioned in section 406(2);

(g)a deduction under section 137 of CTA 2010 (group relief) or section 188CK of that Act (group relief for carried-forward losses) if and to the extent that it constitutes a loss of the worldwide group;

(ga)a reduction under paragraph 37(3)(b) of Schedule 5 to FA 2019 (non-UK resident companies carrying on UK property businesses etc: unrelieved amounts);

(h)a qualifying tax relief.

(1A)For the purposes of subsection (1)(b) “relevant enactment” means—

(a)section 86A of CTA 2009 (contributions to flood and coastal erosion risk management projects);

(b)section 142 of CTA 2009 (waste disposal site preparation expenditure);

(c)section 145 of CTA 2009 (waste disposal site restoration payments);

(d)section 147 of CTA 2009 (cemeteries and crematoria).

(2)For the purposes of subsection (1)(g) the deduction constitutes a “loss of the worldwide group” if and to the extent that it comprises surrenderable amounts that are referable to times at which the surrendering company was a member of the worldwide group.

(3)An amount is a qualifying tax relief for the purposes of subsection (1)(h) if it is any of the following—

(a)an R&D expenditure credit under Chapter 1A of Part 13 of CTA 2009;

(b)a deduction under section 1044, 1063, 1068 or 1087 of CTA 2009 (additional relief for expenditure on research and development);

(c)an amount which is treated as a trading loss as a result of section 1092 of CTA 2009 (SMEs: deemed trading loss for pre-trading expenditure);

(d)a deduction under section 1147 or 1149 of CTA 2009 (relief for expenditure on contaminated or derelict land);

(e)a deduction under section 1199 of CTA 2009 (film tax relief);

(f)a deduction under section 1216CF of CTA 2009 (television tax relief);

(g)a deduction under section 1217CF of CTA 2009 (video games tax relief);

(h)a deduction under section 1217H of CTA 2009 (relief in relation to theatrical productions);

(i)a deduction under section 1217RD of CTA 2009 (orchestra tax relief);

(j)a deduction under section 1218ZCE of CTA 2009 (museums and galleries exhibition tax relief);

(k)a qualifying charitable donation (whether made in the accounting period mentioned in section 406(2) or an earlier one);

(l)a deduction under section 357A of CTA 2010 (profits from patents etc chargeable at lower rate of corporation tax).

(4)An amount is an excluded amount for the purposes of condition B in section 406 if it is an allowable loss for the purposes of TCGA 1992.