Commentary on Sections Overview Chapter 1: Share incentive plans Section 985: References to a deduction being allowed to a company
2522.This section explains how a deduction allowed by this Chapter is given to companies carrying on different types of business. It is based on paragraphs 1 and 13 of Schedule 4AA to ICTA.
2523.Paragraph 1(3) of Schedule 4AA to ICTA allows a deduction in calculating trade profits. Section 21A of ICTA applies this rule to the calculation of the profits of a property business. These deductions are dealt with in subsection (2).
2524.A property business may also be an investment business. Subsection (3) makes specific provision for a company with investment business. The deduction is allowed as an expense of management (see Chapter 2 of Part 16).
2525.If the business is both a property business and an investment business subsection (3) gives priority to subsection (2). This priority is based on section 75(2) of ICTA which provides that a deduction as an expense of management is not given if the deduction is otherwise allowable.