18(1)Sub-paragraphs (2) and (3) apply if, but for those sub-paragraphs—
(a)one company (“company A”) would be entitled to old R&D relief, and
(b)another company (“company B”) would be entitled to new R&D relief,
in respect of expenditure attributable to the same research and development.
(2)If company B would have been entitled to old R&D relief in respect of its expenditure had the Part 1 amendments not been made, only company B is entitled to the relief.
(3)In any other case, only company A is entitled to the relief.
(4)Sub-paragraph (5) applies if—
(a)a company incurs pre-commencement expenditure,
(b)the company is not entitled to old R&D relief in respect of the expenditure, and
(c)had the expenditure been post-commencement expenditure, it would have been—
(i)qualifying Chapter 1A expenditure by virtue of section 1042E of CTA 2009 or section 1042F of that Act as it refers to section 1042E, or
(ii)qualifying Chapter 2 expenditure by virtue of section 1053 of CTA 2009 (as it has effect after the Part 1 amendments) or section 1053A of that Act as it refers to section 1053.
(5)The company is to be treated as satisfying sections 1042F(4) and 1053A(4) of CTA 2009 for the purposes of ascertaining the entitlement of another company to new R&D relief in respect of expenditure attributable to the same research and development as the expenditure mentioned in sub-paragraph (4).
(6)Sub-paragraph (7) applies if—
(a)in respect of pre-commencement expenditure attributable to research and development, one company (“company C”)—
(i)is not entitled to old R&D relief, but
(ii)would be so entitled if none of sections 104C(2), 104G(5), 104H(6), 104J(4), 104K(5), 104L(4), 1052(5) and 1053(4) of CTA 2009 (as they have effect before the Part 1 amendments) applied, and
(b)in respect of post-commencement expenditure attributable to the same research and development, another company (“company D”) would, had the expenditure been pre-commencement expenditure, have been entitled to old R&D relief by virtue of section 1053 of CTA 2009 (as it has effect before the Part 1 amendments).
(7)For the purpose of ascertaining the entitlement of company D to new R&D relief, the research and development is to be treated as contracted out by company D within the meaning of section 1133 of CTA 2009 (as it has effect after the Part 1 amendments).
(8)In this paragraph—
“the new R&D provisions” means Part 13 of CTA 2009 as it has effect after the Part 1 amendments;
“new R&D relief” means relief under the new R&D provisions;
“the old R&D provisions” means Chapter 6A of Part 3 or Part 13 of CTA 2009 as that Chapter or Part has effect before the Part 1 amendments;
“old R&D relief” means relief under the old R&D provisions;
“the Part 1 amendments” means the amendments made by Part 1 of this Schedule;
“post-commencement expenditure” means expenditure incurred in an accounting period beginning on or after the appointed day;
“pre-commencement expenditure” means expenditure incurred in an accounting period beginning before the appointed day.