{ "url": "https://openlegislation.uk/taxation-international-and-other-provisions-act-2010/section-407", "json_url": "https://openlegislation.uk/taxation-international-and-other-provisions-act-2010/section-407.json", "legislation": "ukpga/2010/8", "legislation_title": "Taxation (International and Other Provisions) Act 2010", "legislation_url": "https://openlegislation.uk/taxation-international-and-other-provisions-act-2010", "path": "section/407", "kind": "section", "number": "407", "heading": "Amounts not brought into account in determining a company's tax-EBITDA", "text": "(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—\n(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);\n(b) an allowance or charge under CAA 2001 or capital expenditure for which a deduction is given under a relevant enactment;\n(c) an excluded relevant intangibles debit or an excluded relevant intangibles credit (see section 408);\n(d) a loss that—\n(i) is made by the company in an accounting period other than that mentioned in section 406(2), and\n(ii) is not an allowable loss for the purposes of TCGA 1992;\n(e) a deficit from the company's loan relationships for an accounting period other than that mentioned in section 406(2);\n(f) expenses of management of the company that are referable to an accounting period other than that mentioned in section 406(2);\n(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;\n(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);\n(h) a qualifying tax relief.\n(1A) For the purposes of subsection (1)(b) “relevant enactment” means—\n(a) section 86A of CTA 2009 (contributions to flood and coastal erosion risk management projects);\n(b) section 142 of CTA 2009 (waste disposal site preparation expenditure);\n(c) section 145 of CTA 2009 (waste disposal site restoration payments);\n(d) section 147 of CTA 2009 (cemeteries and crematoria).\n(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.\n(3) An amount is a qualifying tax relief for the purposes of subsection (1)(h) if it is any of the following—\n(a) an R&D expenditure credit under Chapter 1A of Part 13 of CTA 2009;\n(b) a deduction under section 1044, 1063, 1068 or 1087 of CTA 2009 (additional relief for expenditure on research and development);\n(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);\n(d) a deduction under section 1147 or 1149 of CTA 2009 (relief for expenditure on contaminated or derelict land);\n(e) a deduction under section 1199 of CTA 2009 (film tax relief);\n(f) a deduction under section 1216CF of CTA 2009 (television tax relief);\n(g) a deduction under section 1217CF of CTA 2009 (video games tax relief);\n(h) a deduction under section 1217H of CTA 2009 (relief in relation to theatrical productions);\n(i) a deduction under section 1217RD of CTA 2009 (orchestra tax relief);\n(j) a deduction under section 1218ZCE of CTA 2009 (museums and galleries exhibition tax relief);\n(k) a qualifying charitable donation (whether made in the accounting period mentioned in section 406(2) or an earlier one);\n(l) a deduction under section 357A of CTA 2010 (profits from patents etc chargeable at lower rate of corporation tax).\n(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.", "extent": null, "status": null, "version": "current", "annotations": [ { "type": "F", "label": "F1", "text": "Pt. 10: the existing Pt. 10 renumbered as Pt. 11 (except for ss. 375, 376 which are repealed), the existing ss. 372-374, 377-382 renumbered as ss. 499-507 and a new Pt. 10 (ss. 372-498) inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1, 10(1)(2)(a)(3) (with Sch. 5 paras. 27, 32-34)" }, { "type": "F", "label": "F2", "text": "Words in s. 407(1)(a) inserted (with effect in accordance with Sch. 3 para. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 5(2)" }, { "type": "F", "label": "F3", "text": "Words in s. 407(1)(b) inserted (for periods of account ending on or after 31.12.2021) by Finance Act 2026 (c. 11), s. 62(1)(a)(2) (with s. 62(3))" }, { "type": "F", "label": "F4", "text": "S. 407(1)(ga) inserted (with effect in accordance with Sch. 3 para. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 5(3)" }, { "type": "F", "label": "F5", "text": "S. 407(1A) inserted (for periods of account ending on or after 31.12.2021) by Finance Act 2026 (c. 11), s. 62(1)(b)(2) (with s. 62(3))" }, { "type": "F", "label": "F6", "text": "Words in s. 407(3)(a) substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 14(4)(a), 16; S.I. 2024/286, reg. 2" } ], "outstanding_effects": [], "provenance": { "source": "legislation.gov.uk", "source_url": "https://www.legislation.gov.uk/ukpga/2010/8/section/407", "retrieved_at": "2026-10-29T09:10:17.008829+00:00" }, "licence": "Open Government Licence v3.0", "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/", "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives." }