|
| |
|
company (apart from the ultimate debtor) for the purposes of |
| |
Part 3 of CTA 2009 (trading income). |
| |
(7) | In subsection (6) “relevant UK connected company” means a UK |
| |
resident company connected with the CFC, the main business of |
| |
which is banking business or insurance business. |
| 5 |
(8) | A creditor relationship of the CFC cannot be a qualifying loan |
| |
| |
(a) | the CFC receives relevant UK funds or other assets for the |
| |
purpose of funding the loan which is the subject of the CFC’s |
| |
| 10 |
(b) | the provision of the relevant UK funds or other assets is itself |
| |
funded (wholly or partly and directly or indirectly) by a loan |
| |
made to a UK connected company, |
| |
(c) | the relevant loan is wholly or mainly used to repay wholly or |
| |
partly another loan made to the ultimate debtor by a person |
| 15 |
not connected with the ultimate debtor, and |
| |
(d) | the events mentioned in paragraphs (a) to (c) take place |
| |
under, or are otherwise connected (directly or indirectly) |
| |
with, an arrangement the main purpose, or one of the main |
| |
purposes, of which is to obtain a tax advantage for any |
| 20 |
| |
| |
(a) | “relevant UK funds or other assets” and “UK connected |
| |
company” have the same meaning as in section 371EC, and |
| |
(b) | in paragraph (c) “the relevant loan” means— |
| 25 |
(i) | the loan which is the subject of the CFC’s creditor |
| |
| |
(ii) | if the ultimate debtor is determined in accordance |
| |
with section 371IG(4) or (5), loan B. |
| |
(10) | In subsections (4)(b) and (9)(b)(ii) references to loan B do not include |
| 30 |
| |
(a) | which loan A is not made and used to fund, or |
| |
(b) | in relation to which the requirement of section 371IG(3)(c) is |
| |
| |
371II | Power to amend definitions |
| 35 |
The HMRC Commissioners may by regulations amend this |
| |
| |
(a) | so as to amend the definition of “qualifying resources” for the |
| |
purposes of section 371IB, or |
| |
(b) | so as to amend the definition of “qualifying loan |
| 40 |
relationship” for the purposes of this Chapter (including by |
| |
way of amending the definition of “ultimate debtor”). |
| |
| |
(1) | A claim under this Chapter must be made by being included in |
| |
company C’s company tax return for the relevant corporation tax |
| 45 |
accounting period (as defined in section 371BC(3)). |
| |
|
| |
|
| |
|
(2) | The claim may be included in the return originally made or by |
| |
| |
(3) | A claim under this Chapter may be made, amended or withdrawn at |
| |
any time up to whichever is the last of the following dates— |
| |
(a) | the first anniversary of the filing date for company C’s |
| 5 |
company tax return of the relevant corporation tax |
| |
accounting period under paragraph 14 of Schedule 18 to FA |
| |
| |
(b) | if notice of enquiry is given into that return under paragraph |
| |
24 of that Schedule, 30 days after the enquiry is completed; |
| 10 |
(c) | if after such an enquiry an officer of Revenue and Customs |
| |
amends the return under paragraph 34(2) of that Schedule, 30 |
| |
days after notice of the amendment is issued; |
| |
(d) | if an appeal is brought against such an assessment, 30 days |
| |
after the date on which the appeal is finally determined. |
| 15 |
(4) | A claim under this Chapter may be made, amended or withdrawn at |
| |
a later time if an officer of Revenue and Customs allows it. |
| |
(5) | In any event, if after a claim under this Chapter is made there is a |
| |
change of circumstances affecting the tested income amount or the |
| |
tested expense amount mentioned in section 371IE(2), the claim may |
| 20 |
be amended at any time within the period of 12 months after the |
| |
change of circumstances for the purpose of taking account of the |
| |
| |
(6) | The time limits otherwise applicable to amendment of a company tax |
| |
return do not apply to an amendment to the extent that it makes, |
| 25 |
amends or withdraws a claim under this Chapter within the time |
| |
allowed by or under this section. |
| |
(7) | In subsection (3) references to an enquiry into a company tax return |
| |
do not include an enquiry restricted to a previous amendment |
| |
making, amending or withdrawing a claim under this Chapter. |
| 30 |
(8) | An enquiry is so restricted if— |
| |
(a) | the scope of the enquiry is limited as mentioned in paragraph |
| |
25(2) of Schedule 18 to FA 1998, and |
| |
(b) | the amendment giving rise to the enquiry consisted of the |
| |
making, amending or withdrawing of a claim under this |
| 35 |
| |
| |
The exempt period exemption |
| |
371JA | Introduction to Chapter |
| |
(1) | This Chapter sets out an exemption called “the exempt period |
| 40 |
exemption” for the purposes of section 371BA(2)(b). |
| |
(2) | Section 371JE also provides for adjustments of profits which would |
| |
otherwise pass through the CFC charge gateway (see section |
| |
371BB(2)(b)) linked to the exempt period exemption. |
| |
|
| |
|
| |
|
| |
(1) | The exempt period exemption applies for a CFC’s accounting period |
| |
| |
(a) | the accounting period ends during an exempt period of the |
| |
CFC (see sections 371JC and 371JD), |
| 5 |
(b) | the subsequent period condition is met, and |
| |
(c) | the chargeable company condition is met. |
| |
(2) | The subsequent period condition is met if— |
| |
(a) | the CFC does not cease to be a CFC before having at least one |
| |
accounting period which begins after the end of the exempt |
| 10 |
| |
(b) | section 371BC (charging the CFC charge) does not apply in |
| |
relation to the CFC’s first accounting period to begin after the |
| |
end of the exempt period (see section 371BA(2)). |
| |
(3) | The chargeable company condition is met if, at all times during the |
| 15 |
| |
(a) | the charging condition in section 371JC is met, and |
| |
(b) | each company which would be a chargeable company for the |
| |
purposes of that condition is an original chargeable company |
| |
or is connected with an original chargeable company. |
| 20 |
| |
“original chargeable company” means a company which, for |
| |
the purposes of the charging condition in section 371JC, |
| |
would be a chargeable company at the beginning of the |
| |
| 25 |
“the relevant period” means the period which— |
| |
(a) | begins immediately after the beginning of the exempt |
| |
| |
(b) | ends at the end of the CFC’s first accounting period to |
| |
begin after the end of the exempt period. |
| 30 |
(5) | This section is subject to section 371JF (anti-avoidance). |
| |
371JC | When does an exempt period begin? |
| |
(1) | An exempt period of a CFC begins at any time (“the relevant time”) |
| |
during an accounting period of the CFC if— |
| |
(a) | the initial condition is met, |
| 35 |
(b) | the charging condition is met at the relevant time, and |
| |
(c) | at no time during the relevant preceding period (if there is |
| |
one) is the charging condition met. |
| |
(2) | The initial condition is met if— |
| |
(a) | immediately before the relevant time, the company (“C”) |
| 40 |
which is the CFC is carrying on a business, or |
| |
(b) | if the relevant time is the time at which C is incorporated or |
| |
formed, C is formed or incorporated by one or more persons |
| |
for the purpose of controlling one or more companies in |
| |
circumstances where it is expected that an exempt period will |
| 45 |
begin in relation to one or more of those companies when C |
| |
begins to control the company or companies. |
| |
|
| |
|
| |
|
(3) | To determine if the charging condition is met at any time, assume— |
| |
(a) | that the company which is the CFC is a CFC at the time in |
| |
question if that is not otherwise the case, |
| |
(b) | that the time in question is itself an accounting period of the |
| |
| 5 |
(c) | that section 371BC (charging the CFC charge) applies in |
| |
relation to the assumed accounting period. |
| |
(4) | The charging condition is met at the time in question if, as a result of |
| |
steps 1, 3 and 4 in section 371BC(1), there would be one or more |
| |
chargeable companies in relation to the assumed accounting period. |
| 10 |
(5) | “The relevant preceding period” means the period of 12 months |
| |
ending immediately before the relevant time, excluding any part of |
| |
that period during which the company which is the CFC does not |
| |
| |
371JD | How long is an exempt period? |
| 15 |
(1) | Subject to what follows, an exempt period of a CFC lasts 12 months. |
| |
(2) | Subsection (3) applies if a notice is given to an officer of Revenue and |
| |
Customs requesting that the length of an exempt period of a CFC be |
| |
extended (or further extended). |
| |
(3) | An officer of Revenue and Customs may extend (or further extend) |
| 20 |
the length of the exempt period. |
| |
(4) | A notice under subsection (2) must be given no later than the end of |
| |
the exempt period (as it stands at the time the notice is given). |
| |
(5) | A notice under subsection (2) may be given only by a company |
| |
which, at the time the notice is given, would be a chargeable |
| 25 |
company for the purposes of the charging condition in section 371JC. |
| |
371JE | Adjustment of profits passing through the CFC charge gateway |
| |
(1) | This section applies for a CFC’s accounting period if— |
| |
(a) | the accounting period begins, but does not end, during an |
| |
exempt period of the CFC, and |
| 30 |
(b) | the subsequent period condition and the chargeable |
| |
company condition in section 371JB are both met. |
| |
(2) | The CFC’s assumed total profits which would otherwise pass |
| |
through the CFC charge gateway are to be adjusted to ensure that no |
| |
profits which arise in the exempt period, as determined on a just and |
| 35 |
reasonable basis, pass through the CFC charge gateway. |
| |
(3) | This section is subject to section 371JF (anti-avoidance). |
| |
| |
(1) | The exempt period exemption does not apply for a CFC’s accounting |
| |
period (“the relevant accounting period”) if condition A or B is met. |
| 40 |
| |
(a) | an arrangement is entered into at any time, |
| |
(b) | the main purpose, or one of the main purposes, of the |
| |
arrangement is to secure a tax advantage for any person, |
| |
|
| |
|
| |
|
(c) | the arrangement is linked to the exempt period exemption |
| |
applying or being expected to apply (apart from this |
| |
| |
(i) | for the relevant accounting period, or |
| |
(ii) | for that period and one or more other accounting |
| 5 |
| |
(d) | the arrangement involves one or both of the following— |
| |
(i) | the CFC holding assets which give rise to non-trading |
| |
finance profits or trading finance profits of the CFC, |
| |
| 10 |
(ii) | the CFC holding intellectual property which gives |
| |
rise to any income of the CFC. |
| |
| |
(a) | an arrangement is entered into at any time, |
| |
(b) | in consequence of the arrangement, the length of any |
| 15 |
accounting period of the CFC is less than 12 months, and |
| |
(c) | the main purpose, or one of the main purposes, of the |
| |
arrangement is to secure that the exempt period exemption |
| |
| |
(i) | for the relevant accounting period, or |
| 20 |
(ii) | for that period and one or more other accounting |
| |
| |
(4) | In this section references to the exempt period exemption include |
| |
references to section 371JE. |
| |
371JG | Amendment of company tax returns |
| 25 |
(1) | This section applies in relation to a company’s company tax return |
| |
for a corporation tax accounting period if an exempt period of a CFC |
| |
falls (wholly or partly) in the corporation tax accounting period. |
| |
(2) | Any amendment of the return which relates to the application (or |
| |
non-application) of the exempt period exemption or section 371JE for |
| 30 |
an accounting period of the CFC may be made by the company at |
| |
any time no later than 12 months after the relevant filing date. |
| |
(3) | “The relevant filing date” means the date which is the filing date |
| |
under paragraph 14 of Schedule 18 to FA 1998 for the company’s |
| |
company tax return for its corporation tax accounting period in |
| 35 |
which ends the CFC’s first accounting period to begin after the end |
| |
| |
(4) | “Corporation tax accounting period” means an accounting period for |
| |
corporation tax purposes. |
| |
| 40 |
The excluded territories exemption |
| |
371KA | Introduction to Chapter |
| |
This Chapter sets out an exemption called “the excluded territories |
| |
exemption” for the purposes of section 371BA(2)(b). |
| |
|
| |
|