|
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| |
| |
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| | the apportioned profit (see subsections (2H) to (4)), |
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| | |
| | (ii) | Q% is to be reduced by the same proportion as P% is |
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| | reduced under sub-paragraph (i). |
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| | (2B) | Condition D is that, at all times during the CFC’s accounting period, |
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| | CC has the relevant interest, or the part of a relevant interest, by virtue |
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| | of its holding shares (“the relevant shares”) in the CFC (directly or |
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| | |
| | (2C) | Condition E is met if the following requirement is met in relation to a |
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| | time during the relevant corporation tax accounting period. |
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| | (2D) | The requirement is that any increase (or any part of any increase) in |
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| | the value of the relevant shares which occurs at that time is not (or |
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| | would not be) brought into account at step 1 in section 73 of FA 2012 |
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| | in determining whether CC has an I-E profit for the relevant |
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| | corporation tax accounting period. |
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| | (2E) | Condition F is met if the following requirement is met in relation to a |
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| | time during the relevant corporation tax accounting period. |
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| | (2F) | The requirement is that any dividend or other distribution (or any part |
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| | of any dividend or other distribution) received at that time by CC from |
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| | the CFC (directly or indirectly) by virtue of its holding the relevant |
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| | shares is not (or would not be) brought into account at step 1 in section |
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| | 73 of FA 2012 in determining whether CC has an I-E profit for the |
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| | relevant corporation tax accounting period. |
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| | (2G) | Condition G is that the assets which represent the relevant interest, or |
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| | the part of a relevant interest, during the CFC’s accounting period are |
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| | (to any extent) assets held by CC for the purposes of CC’s long-term |
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| | |
| | (2H) | “The apportioned profit” means so much of P% as is attributable to CC |
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| | having the relevant interest, or the part of a relevant interest, during the |
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| | CFC’s accounting period.’. |
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| |
| | |
| Schedule 20, page 433, line 14, leave out from ‘under’ to end of line 15 and insert |
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| |
| | (i) | the law of the territory in which the CFC is |
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| | |
| | (ii) | the articles of association or other document |
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| | |
| | (iii) | any arrangement entered into by or in relation to the |
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| | |
| |
| | |
| Schedule 20, page 435, line 33, at end insert— |
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| | ‘(2A) | Profits treated as non-trading finance profits under subsection (2) are |
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| | not to be taken to fall within section 371CB(3) or (4).’. |
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| |
| |
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| |
| | |
| Schedule 20, page 435, line 36, at end insert— |
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| | ‘(3A) | For this purpose, section 337(1) (definition of “the worldwide group”) |
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| | applies with the omission of paragraph (a).’. |
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| |
| | |
| Schedule 20, page 436, leave out lines 36 and 37 and insert ‘by a UK connected |
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| |
| | (3) | In subsection (2)(b)(ii)— |
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| | “services” does not include services provided as part of insurance |
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| | |
| | “UK connected company” means— |
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| | (a) | a UK resident company connected with the CFC, or |
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| | (b) | a non-UK resident company connected with the CFC acting |
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| | through a UK permanent establishment.’. |
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| |
| | |
| Schedule 20, page 447, line 1, leave out ‘derive (directly or indirectly) from’ and |
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| insert ‘represent, or derive (directly or indirectly) from,’. |
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| |
| | |
| Schedule 20, page 449, line 14, leave out ‘section 371FB’ and insert ‘sections |
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| |
| |
| | |
| Schedule 20, page 449, line 39, leave out from ‘CFC”)’ to end of line 40. |
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| |
| | |
| Schedule 20, page 450, line 41, leave out ‘371BC(3))’ and insert ‘371BC(3), |
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| ignoring sections 371BG(3)(a) and 371BH(2A)(b))’. |
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| |
| | |
| Schedule 20, page 450, line 41, at end insert— |
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| | ‘371FBA | Loans from foreign permanent establishments of UK resident |
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| | |
| | (1) | Subsection (2) applies if— |
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| | (a) | there is a company (“C”) which has made an election under |
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| | section 18A of CTA 2009 (exemption for profits or losses of |
|
| | foreign permanent establishments), |
|
| | (b) | during a relevant accounting period of C which begins on or |
|
| | after 1 January 2013, C has a creditor relationship which, |
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| | applying the assumptions set out in section 18H(3) of CTA |
|
| | 2009 in relation to C for the relevant accounting period, would |
|
| | be a qualifying loan relationship (within the meaning of |
|
|
|
| |
| |
|
| | Chapter 9 of this Part) of C in relation to which the CFC would |
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| | |
| | (c) | in the application of section 18H(2) of CTA 2009 for the |
|
| | relevant accounting period, C makes a claim under Chapter 9 |
|
| | of this Part (as applied by section 18H(2)), and |
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| | (d) | the relevant accounting period falls wholly or partly in the |
|
| | |
| | (2) | 75% of the principal outstanding during the CFC’s accounting period |
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| | on the loan which is the subject of the qualifying loan relationship is |
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| | to be added to the CFC’s free capital or free assets (as the case may |
|
| | |
| | (3) | Terms used in this section which are defined in section 18A of CTA |
|
| | 2009 have the meaning given by that section.’. |
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| |
| | |
| Schedule 20, page 451, leave out lines 43 and 44 and insert ‘by a UK connected |
|
| |
| | (2A) | In subsection (2)(b)(ii)— |
|
| | “services” does not include services provided as part of insurance |
|
| | |
| | “UK connected company” means— |
|
| | (c) | a UK resident company connected with the CFC, or |
|
| | (d) | a non-UK resident company connected with the CFC acting |
|
| | through a UK permanent establishment.’. |
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| |
| | |
| Schedule 20, page 452, leave out lines 9 to 11. |
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| |
| | |
| Schedule 20, page 452, line 27, at end insert— |
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| | ‘(8) | In this section “original contract of insurance”, in relation to a contract |
|
| | of reinsurance which is one in a chain of contracts of reinsurance, |
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| | means the original contract of insurance reinsured by the first contract |
|
| | in the chain; and in subsection (6)(b) the reference to the original |
|
| | insured is to be read accordingly.’. |
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| |
| | |
| Schedule 20, page 455, line 3, leave out from ‘which’ to end of line 4 and insert ‘a |
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| member of the CFC group incurs a debt in the United Kingdom to— |
|
| | (a) | a non-UK resident person, or |
|
| | (b) | a UK resident person who is not a member of the CFC group.’. |
|
| |
| | |
| Schedule 20, page 457, line 11, leave out from ‘this’ to end of line 15 and insert |
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| |
|
|
| |
| |
|
| | (i) | the charging of a sum on company C at step 5 in |
|
| | section 371BC(1) would cause section 314A (finance |
|
| | income amounts of chargeable companies) to apply in |
|
| | the case of company C, and |
|
| | (ii) | the relevant finance profits (see section 314A(1)(c)) |
|
| | would include the leftover profits.’. |
|
| |
| | |
| Schedule 20, page 457, line 33, after ‘have’ insert ‘as a result of the application of |
|
| |
| |
| | |
| Schedule 20, page 457, leave out lines 39 to 41 and insert— |
|
| | ‘(6) | For the purposes of subsection (5)(a) assume that company C’s |
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| | finance income amount would include P% of the leftover profits. |
|
| | (6A) | “P%” has the meaning given by section 371BC(3), subject to sections |
|
| | 371BG(3)(a) and 371BH(2A)(b). |
|
| | (6B) | Subject to what follows, terms used in this section which are defined |
|
| | in Part 7 (tax treatment of financing costs and income) have the same |
|
| | meaning as they have in Part 7. |
|
| | (6C) | In subsections (2) to (4) references to the tested income amount or the |
|
| | tested expense amount are to that amount determined without regard |
|
| | to any debits, credits or other amounts arising from UK banking |
|
| | business or insurance business. |
|
| | (6D) | But subsection (6C) does not apply for the purpose of determining any |
|
| | finance income amount under section 314A or affect the way in which |
|
| | any such amount is to be taken into account in determining the tested |
|
| | income amount or the tested expense amount. |
|
| | (6E) | “UK banking business or insurance business” means banking business |
|
| | or insurance business carried on by— |
|
| | (a) | a UK resident company, or |
|
| | (b) | a non-UK resident company acting through a UK permanent |
|
| | |
| |
| | |
| Schedule 20, page 458, leave out lines 1 to 5. |
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| |
| | |
| Schedule 20, page 458, line 17, leave out ‘(so far as not reflected in the step 1 |
|
| |
| |
| | |
| Schedule 20, page 458, line 20, leave out ‘(which is not itself a qualifying loan |
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| relationship of the CFC)’ and insert ‘(other than a qualifying loan relationship)’. |
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|
|
| |
| |
|
| |
| | |
| Schedule 20, page 458, line 30, leave out from beginning to ‘credits’ in line 42 and |
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| |
| | | ‘Allocate to the qualifying loan relationship a just and reasonable |
|
| | proportion of the credits from the CFC’s relevant debtor relationships |
|
| | which are brought into account in determining the CFC’s non-trading |
|
| | finance profits (so far as not reflected in the step 2 credits). |
|
| | | Add the credits to the step 2 credits. |
|
| | | The result is “the step 3 credits”. |
|
| | | A debtor relationship of the CFC is “relevant” if the loan which is the |
|
| | subject of it is used by the CFC to fund the loan which is the subject |
|
| | of the qualifying loan relationship. |
|
| | |
| | | Allocate to the qualifying loan relationship a just and reasonable |
|
| | proportion of the credits and debits which are brought into account in |
|
| | determining the CFC’s non-trading finance profits so far as they— |
|
| | (a) | are from any derivative contract or other arrangement (other |
|
| | than a qualifying loan relationship or a relevant debtor |
|
| | relationship) entered into by the CFC as a hedge of risk in |
|
| | connection with a relevant debtor relationship, and |
|
| | (b) | are attributable to the hedge of risk. |
|
| | | If the credits exceed the debits add the excess to the step 3 credits and |
|
| | if the debits exceed the credits subtract the deficit from the step 3 |
|
| | |
| | | The result is “the step 4 credits”. |
|
| | |
| | | Allocate to the qualifying loan relationship a just and reasonable |
|
| | |
| | (a) | the debits from the CFC’s loan relationships which are |
|
| | brought into account in determining the CFC’s non-trading |
|
| | finance profits (so far as not reflected in the step 4 credits), |
|
| | |
| | (b) | any amounts set off under Chapter 16 of Part 5 of CTA 2009 |
|
| | (non-trading deficits) against amounts which, apart from the |
|
| | set off, would be included in the CFC’s non-trading finance |
|
| | |
| | |
| |
| | |
| Schedule 20, page 459, line 35, leave out ‘business,’ and insert ‘business (as the |
|
| |
| |
| | |
| Schedule 20, page 459, line 36, leave out from ‘company’ to end of line 37. |
|
| |
| | |
| Schedule 20, page 460, line 39, leave out ‘a loan to another person’ and insert ‘— |
|
|