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Chapter 4
Corporation Tax
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Amendment of section 766 (tax credit for research and development expenditure) of Principal Act.
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46.— (1) Section 766 of the Principal Act is amended in subsection (1)—
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(a) in paragraph (a), in paragraph (i) of the definition of “ threshold amount ” by substituting “1 January 2010” for “1 January 2007”, and
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(b) in paragraph (b)—
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(i) by substituting “activities;” for “activities.” in subparagraph (vii), and
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(ii) by inserting the following after subparagraph (vii):
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“(viii) where in any period a company—
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(I) incurs expenditure on research and development, and
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(II) pays a sum (not being a sum referred to in subparagraph (vii)(II)) to a person, other than to a person who is connected (within the meaning of section 10) with the company, in order for that person to carry on research and development activities, and that person does not claim relief under this section in respect of such expenditure on research and development,
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so much of the sum so paid as does not exceed 10 per cent of that expenditure incurred by the company on research and development shall be treated as if it were expenditure incurred by the company on the carrying on by it of research and development activities.”.
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(2) (a) Subject to paragraph (b), this section applies for accounting periods commencing on or after 1 January 2007.
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(b) Subsection (1)(b) applies as respects accounting periods ending on or after 1 January 2007 in respect of expenditure incurred on or after 1 January 2007.
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