# Income and Corporation Taxes Act 1988, Paragraph 6

Extent: E+W+S+N.I.

(1) For the purposes of this Schedule, expenditure is “qualifying pre-commencement expenditure” if it meets conditions A to D.
(2) Condition A is that the expenditure is incurred on or after 1st January 2006.
(3) Condition B is that the expenditure is incurred in the course of oil extraction activities.
(4) Condition C is that the expenditure is incurred by a person with a view to carrying on a ring fence trade but before the person sets up and commences the ring fence trade.
(5) Condition D is that the expenditure—
(a) is subsequently allowable as a deduction in calculating the profits of the ring fence trade for the commencement period (whether or not any part of it is so allowable for any post-commencement period), or
(b) is relevant R&D expenditure incurred by an SME.
(6) For the purposes of this paragraph, expenditure incurred by a company is “relevant R&D expenditure incurred by an SME” if—
(a) the company makes an election under section 1045 of CTA 2009 (R&D tax relief for SMEs: alternative treatment of pre-trading expenditure) in respect of that expenditure, but
(b) the company does not make a claim for an R&D tax credit under section 1054 of that Act in respect of that expenditure.
(7) In the case of any qualifying pre-commencement expenditure which is relevant R&D expenditure incurred by an SME, the amount of that expenditure is treated for the purposes of this Schedule as being equal to 150% of its actual amount.
(8) In the case of any qualifying pre-commencement expenditure which is relevant R&D expenditure incurred by a large company, the amount of that expenditure is treated for the purposes of this Schedule as being equal to 125% of its actual amount.
(9) For this purpose “relevant R&D expenditure incurred by a large company” means qualifying Chapter 5 expenditure as defined by section 1076 of CTA 2009 (R&D tax relief for large companies).

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Source: https://www.legislation.gov.uk/ukpga/1988/1/schedule/19C/paragraph/6 (the official version)
Page: https://openlegislation.uk/income-and-corporation-taxes-act-1988/schedule-19C/paragraph-6
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.