Revenue Note for Guidance

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Revenue Note for Guidance

696J Provisions relating to groups

Summary

This section contains certain provisions in relation to groups. This section provides that expenditure incurred by a company may, in certain circumstances, be deemed to have been incurred by an associated company for the purposes of calculating the cumulative field costs and eligible expenditure figure, where one company is a subsidiary of the other or both are subsidiaries of a third company.

Details

(1) Where the eligible expenditure on a taxable field is incurred by one company (the first company) and the first company either—

  1. owns a subsidiary, or
  2. is itself owned by another company (the parent),

then the first company can elect that the expenditure is deemed have been incurred –

  1. by the subsidiary, or
  2. by the parent, or by another subsidiary of the parent.

(2) Where expenditure is deemed to have been incurred by a company (the other company), following an election under subsection (1), then –

  1. it is deemed to have been incurred at the time it was actually incurred by the first company, and
  2. it is deemed to have been incurred by the other company for the purposes of determining the cumulative field costs figure and deemed not to have been incurred by the first company for the purposes of determining the cumulative field costs figure.

(3) Provision is made to ensure that the same expenditure is not double counted for the purposes of determining cumulative figures.

(4) The definitions of subsidiary, etc. in section 694 are applied for the purposes of this section.

Relevant Date: Finance Act 2019