81C Emissions allowances.

(1) In this section—

“Directive” has the same meaning as in section 540A;

“emissions allowance” means—

(a) an allowance within the meaning of Article 3 of the Directive,

(b) an emission reduction unit or ERU, within the meaning of Article 3 of the Directive, or

(c) a certified emission reduction or CER, within the meaning of Article 3 of the Directive;

“profit and loss account”, in relation to an accounting period of a company, has the meaning assigned to it by generally accepted accounting practice and includes an income and expenditure account where a company prepares accounts in accordance with international accounting standards.

(2) Notwithstanding anything in section 81, any amount, computed in accordance with generally accepted accounting practice, charged to the profit and loss account of a company, for the period of account which is the same as the accounting period, in respect of expenditure, for the purposes of a trade carried on by the company, on the purchase of an emissions allowance shall be allowed to be deducted as expenses in computing the amount of the profits or gains of the company to be charged to tax under Case I of Schedule D for the accounting period.

(3) Subject to section 540A, where a company disposes of an emissions allowance which it purchased for the purposes of a trade carried on by it, the consideration for such disposal shall be treated as a trading receipt of the trade.