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Home / Simons-Taxes /Corporate tax /Part D7 Financial service sectors /Division D7.4 Life insurance and friendly societies etc /Calculation of long-term business profits and apportionment of income, expenses and gains under the I-E basis / D7.431 Apportionment of income, expenses and gains under the I-E basis
Commentary

D7.431 Apportionment of income, expenses and gains under the I-E basis


Corporate tax

If a company carries on both BLAGAB and non-BLAGAB business it is necessary to determine what part of the company's income, chargeable gains and expenses are referable to the former and therefore need to be brought into the measure of the I-E profit1. The legislation uses two slightly different methods to firstly apportion income, losses and expenses and secondly chargeable gains.

HMRC guidance on I-E can be found at LAM02000 onwards.

Allocating income, losses and expenses for the I-E basis

Companies are required to use an acceptable commercial method in order to determine what part of any income, loss or debit and expense is referable to BLAGAB2.

While it is clear what is meant by income and expenses, the phrase 'loss or debit' has a particular meaning:

  1. Ìý

    •ÌýÌýÌýÌý losses arising on any separate UK or overseas property business

  2. Ìý

    •ÌýÌýÌýÌý debits in respect of any loan relationships or derivative contracts

  3. Ìý

    •ÌýÌýÌýÌý debits arising on intangible fixed assets, and

  4. Ìý

    •ÌýÌýÌýÌý losses on miscellaneous

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Web page updated on 17 Mar 2025 17:21