Commentary on Sections Part 2: Charge to corporation tax: basic provisions Overview Section 31: Restriction on deductions: payments in respect of intangible assets
141.This section disallows a deduction for inter-company payments for the use of intangibles where the intangible assets are held by the company. The reasoning here is that it is difficult to allocate ownership of intangibles to any one part of a company as if it were an independent enterprise. The section is based on paragraph 4(1) to (3) of Schedule A1 to ICTA.