83 Expenses of management of investment companies
(1) For the purposes of this section and of the other provisions of the Corporation Tax Acts relating to expenses of management, “investment company” means any company whose business consists wholly or mainly of the making of investments, and the principal part of whose income is derived from the making of investments, but includes any savings bank or other bank for savings.
(2) In computing for the purposes of corporation tax the total profits for any accounting period of an investment company resident in the State -
(a) there shall be deducted any sums disbursed as expenses of management (including commissions) for that period, except any such expenses as are deductible in computing income for the purposes of Case V of Schedule D; but
(b) there shall be deducted from the amount treated as expenses of management the amount of any income derived from sources not charged to tax, other than franked investment income.
(3) Where in any accounting period of an investment company the expenses of management deductible under subsection (2), together with any charges on income paid in the accounting period wholly and exclusively for the purposes of the company’s business, exceed the amount of the profits from which they are deductible, the excess shall be carried forward to the succeeding accounting period, and the amount so carried forward shall be treated for the purposes of this section , including any further application of this subsection, as if it had been disbursed as expenses of management for that accounting period.
(4) For the purposes of subsections (2) and (3), there shall be added to a company’s expenses of management in any accounting period the amount of any allowances to be made to the company for that period by virtue of section 109 or 774.
Expenses of management of investment companies: clarification on non-deductibility of interest payments on capital borrowings as an expense of management – eBrief No. 50/15
Expense of Management
Whether an amount that company was required to pay under arrangements which was representative of dividend constituted expenses of management - First Nationwide v R&CC  SFTD 408
Whether business of company consisted wholly or mainly in making investments and whether costs of delisting were expenses of management - Dawsongroup plc v R&CC  STC 1906
Expenses incurred in an abortive take-over were deductible management expenses – Camas plc v Atkinson (Insp. of Taxes) –  STC 860
Interest payments by an investment company to its parent are allowable where the original debts were used for business purposes. MacNiven (HMIT) v Westmoreland Investments Ltd.  STC 237
Abortive acquisition costs are not allowable as expenses of management. Hibernian Insurance Company Ltd v MacUimis. Supreme Court 20 January 2000. ITR Vol 1999-2000 page 113. CLTP 5.3.
Expenses of management not deductible for life assurance business under both Case I and I-E basis. – Johnson (HM Inspector of Taxes) v Prudential Assurance Co Ltd.  STC 439
Case I - non-deductible expenditure
Whether notional management fees should be charged to subsidiaries – Belville Holdings Ltd. (in receivership and liquidation) v Cronin (Inspector of Taxes)  ITR Vol 3 page 340
Meaning of investment company
Meaning of investment company – Casey (Inspector of Taxes) v The Monteagle Estate Co.  ITR Vol 2 page 429 – CLTP 5.2.
Activities insufficient to characterise the company as an investment company. – Howth Estate v WJ Davis (Inspector of Taxes)  ITR Vol 1 page 447 – CLTP 5.1.
Meaning of “making or holding investments”
Inheritance tax cases involving business relief. Taxpayer owned holiday letting property and transferring 85% of property to trust in two tranches and whether property was ‘relevant business property’ consisting ‘mainly…of…making or holding investments’ – Green v Revenue and Customs Commissioners  SFTD 711
Corresponding UK Tax Provision
Section 75, Income and Corporation Taxes Act 1988. Now re-enacted at various places in the Corporation Tax Act 2009. Refer to the Destination Table of that Act for details.
Sections referred to in text
section 109 [Payments in respect of redundancy]
section 774 [Certain approved schemes: exemptions and reliefs]
109 Payments in respect of redundancy
127 Tax treatment of restrictive covenants
144 Distributions out of profits from trading within Shannon Airport
157 Set-off of losses, etc. against franked investment income
375 Limit on renewals allowance for cars
376 Restriction of deduction in respect of running expenses of cars
420 Losses, etc. which may be surrendered by means of group relief
434 Distributions to be taken into account and meaning of “distributable income”, “investment income”, “estate income”, etc
517 Payments to trustees of approved profit sharing scheme
518 Costs of establishing profit sharing schemes
519 Employee share ownership trusts
519B Costs of establishing savings related share option schemes
531W No relief for any payment in relation to parking levy
707 Management expenses
708 Acquisition expenses
710 Profits of life business
711 Chargeable gains of life business
774 Certain approved schemes: exemptions and reliefs
840 Business entertainment
1104 Short title and construction