Commentary on Sections Overview Chapter 5: Companies with investment business: receipts Section 1253: Contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits
3168.This section sets out what happens if a company (or a connected person) receives a benefit in connection with a contribution to a local enterprise organisation or urban regeneration company (see section 1244). It is based on sections 79, 79A and 79B of ICTA. The corresponding rule for trading income is in section 82.
3169.Section 79(9) of ICTA refers to relief having been given “under subsection (1) above”. Strictly, relief for management expenses is given under subsection (2) by reference to a “deduction under subsection (1)”. But it is clear in the context of the section that the recovery under subsection (9) is intended to apply to management expenses as it applies to a trading deduction. The same analysis applies to the corresponding provisions in sections 79A and 79B of ICTA. This section clarifies the position.
3170.The charge is restricted to the amount of the “disqualifying benefit”. That expression is explained in section 1244(5). See the commentary on that section and Change 18 in Annex 1.