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D7.305 Management expenses—overview

A deduction is allowed from the total profits (other than ring fence profits¹) for an accounting period of a company with investment business (see D7.301) for any expenses of management of its investment business referable to that period². The expenses must be in respect of so much of the company's business as consists in the making of investments³. See Dawsongroup plc⁴ where it was held that certain expenses were not allowable because they had not related to the management of the investment business but to the management of specific investments.

Deductions for management expenses must be made before other amounts which are deductible from a company's total profits⁵. The investments concerned must not be held for an unallowable purpose, ie one that is not a business or other commercial purpose of the company, or activities in respect of which the company is not within the charge to corporation tax⁶. See D7.307.

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