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Corporation Tax (Northern Ireland) BillPage 60

(b) must specify the first accounting period of the firm (“the
specified accounting period”) in relation to which it is to have
effect,

(c) must be made before the end of the period of 12 months
5beginning with the end of the specified accounting period, and

(d) if made in accordance with paragraphs (a) to (c)—

(i) has effect in relation to the specified accounting period
and subsequent accounting periods, and

(ii) is irrevocable.

(4) 10For the meaning of “excluded trade”, and for power to make provision
about the meaning of “back-office activities”, see Chapter 17.

357WC Northern Ireland profits etc of firm determined under Chapter 6

(1) This section applies where conditions A and B are met.

(2) Condition A is that a firm is a Northern Ireland firm in an accounting
15period (“the firm’s accounting period”) by virtue of the SME
partnership condition in section 357WA.

(3) Condition B is that a partner in the firm is a company (“the corporate
partner”) that is—

(a) within the charge to corporation tax in relation to the firm’s
20trade, and

(b) an SME in relation to an accounting period of the corporate
partner which—

(i) is the same as the firm’s accounting period, or

(ii) overlaps (to any extent) the firm’s accounting period.

(4) 25Section 357MA (profits or losses of trade that are Northern Ireland
profits or losses etc: SMEs)—

(a) applies in relation to the profits or losses of the firm’s trade for
the firm’s accounting period that are determined under section
1259(3) or (4) of CTA 2009 in relation to the corporate partner,
30but

(b) so applies only for the purpose of allocating (under Part 17 of
that Act) a share of those profits or losses to an accounting
period within subsection (3)(b).

(5) Further provision under which profits or losses of the firm’s trade may
35in relation to the corporate partner be Northern Ireland profits or losses
of the trade or mainstream profits or losses of the trade is contained
in—

(a) Chapters 8 and 15, and

(b) CAA 2001 (see section 6E of that Act).

(6) 40Section 357WH makes further provision about the operation of Part 17
of CTA 2009 in cases in which the profits or losses of the firm’s trade
determined in relation to the corporate partner are Northern Ireland
profits, Northern Ireland losses, mainstream profits or mainstream
losses.

357WD 45 Northern Ireland profits etc of firm determined under Chapter 7

(1) This section applies where—

Corporation Tax (Northern Ireland) BillPage 61

(a) a firm is a Northern Ireland firm in an accounting period (“the
firm’s accounting period”),

(b) a partner in the firm is a company (“the corporate partner”) that
is within the charge to corporation tax in relation to the firm’s
5trade, and

(c) condition A or B is met.

(2) Condition A is that the firm is not an SME in relation to the firm’s
accounting period.

(3) Condition B is that—

(a) 10the firm is an SME in relation to the firm’s accounting period,
and

(b) the corporate partner is not an SME in relation to an accounting
period of the corporate partner which—

(i) is the same as the firm’s accounting period, or

(ii) 15overlaps (to any extent) the firm’s accounting period.

(4) Section 357NA (profits or losses of trade that are Northern Ireland
profits or losses etc: large companies)—

(a) applies in relation to the profits or losses of the firm’s trade for
the firm’s accounting period that are determined under section
201259(3) or (4) of CTA 2009 in relation to the corporate partner,
but

(b) in a case in which condition B is met, so applies only for the
purpose of allocating under Part 17 of that Act a share of those
profits or losses to an accounting period within subsection
25(3)(b).

(5) Further provision under which profits or losses of the firm’s trade may
in relation to the corporate partner be Northern Ireland profits or losses
of the trade or mainstream profits or losses of the trade is contained
in—

(a) 30Chapters 8 and 15, and

(b) CAA 2001 (see section 6E of that Act).

(6) Section 357WH makes further provision about the operation of Part 17
of CTA 2009 in cases in which the profits or losses of the firm’s trade
determined in relation to the corporate partner are Northern Ireland
35profits, Northern Ireland losses, mainstream profits or mainstream
losses.

357WE Sections 357WC and 357WD: interpretation

(1) Section 357MA (profits or losses of trade that are Northern Ireland
profits or losses etc: SMEs) as applied by section 357WC(4), and the
40other provisions of Chapter 6 so far as they apply for the purposes of
section 357MA as so applied, have effect as if—

(a) references to the qualifying trade were to the firm’s trade;

(b) references to the company were to the firm;

(c) references to the accounting period were to the firm’s
45accounting period;

(d) the reference in section 357MA(1) to a qualifying trade by virtue
of section 357KB(1) were to a qualifying partnership trade by
virtue of section 357WB(1);

Corporation Tax (Northern Ireland) BillPage 62

(e) the reference in section 357MA(3) to a qualifying trade by virtue
of section 357KB(2) were to a qualifying partnership trade by
virtue of section 357WB(2).

(2) Section 357KC (meaning of “SME”), in its application to section
5357WD(2) and (3)(a), has effect as if any reference to a company were to
a firm.

(3) Section 357NA (profits or losses of trade that are Northern Ireland
profits or losses etc: large companies) as applied by section 357WD(4),
and the other provisions of Chapter 7 so far as they apply for the
10purposes of section 357NA as so applied, have effect as if—

(a) references to the qualifying trade were to the firm’s trade;

(b) references to the company were to the firm;

(c) references to the accounting period were to the firm’s
accounting period;

(d) 15in section 357NA(1) the reference to a qualifying trade by virtue
of section 357KB(1) were to a qualifying partnership trade by
virtue of section 357WB(1),

(e) in section 357NA(3) the reference to a qualifying trade by virtue
of section 357KB(2) were to a qualifying partnership trade by
20virtue of section 357WB(2);

(f) in section 357NF(5), the reference to a UK resident company
were to a UK resident firm.

357WF Application of section 747 of CTA 2009 to Northern Ireland firm

Chapter 8 (intangible fixed assets) has effect in relation to a Northern
25Ireland firm as if—

(a) references to a qualifying trade were to a qualifying partnership
trade;

(b) references to a company were to a firm;

(c) references to an accounting period of a company were to an
30accounting period of a firm;

(d) references to a Northern Ireland company were to a Northern
Ireland firm;

(e) references to the SME condition in section 357KA were to the
SME partnership condition in section 357WA;

(f) 35references to the large company condition in section 357KA
were to the large partnership condition in section 357WA;

(g) the reference in section 357OB(1)(b) to a qualifying trade by
virtue of section 357KB(1) were to a qualifying partnership
trade by virtue of section 357WB(1).

357WG 40 Application of Part 8A to Northern Ireland firm

Chapter 15 (profits arising from the exploitation of patents etc) has
effect in relation to a Northern Ireland firm as if—

(a) except in relation to the making of elections under section 357A,
references to a company were to the firm,

(b) 45references to a Northern Ireland company were to a Northern
Ireland firm,

(c) references to the trade were to the firm’s trade,

Corporation Tax (Northern Ireland) BillPage 63

(d) the reference in section 357V(2) to an election made by the
company were to an election made by a corporate partner as
defined by section 357GB(1),

(e) the reference in 357V(2) to Part 8A were to Part 8A so far as
5relating to the corporate partner which made the election,

(f) references to an accounting period of a company were to an
accounting period of the firm,

(g) the reference in section 357VB to the SME condition in section
357KA were to the SME condition in section 357WA, and

(h) 10references in section 357VC to the large company condition in
section 357KA and to a qualifying trade by virtue of section
357KB(1) were to the large partnership condition in section
357WA and to a qualifying partnership trade by virtue of
section 357WB(1).

357WH 15 Allocation of Northern Ireland profits etc of firm to company

(1) This section applies where the profits or losses of a firm’s trade that are
determined under section 1259(3) or (4) of CTA 2009 in relation to a
company (“company A”) are—

(a) Northern Ireland profits or losses of the trade,

(b) 20mainstream profits or losses of the trade, or

(c) a combination of—

(i) profits or losses within paragraph (a), and

(ii) profits or losses within paragraph (b).

(2) Section 1262(1) of CTA 2009 (allocation of firm’s profits or losses
25between partners) applies so as to allocate to company A a share of the
profits or losses mentioned in subsection (1)(a) to (c).

For this purpose, in a case within subsection (1)(c), the firm’s profit-
sharing arrangements are treated as applying separately in relation to
each of those profits or losses.

(3) 30In section 1263 of CTA 2009 (profit-making period in which some
partners have losses)—

(a) where subsection (1) of that section applies so that company A’s
share of the profit of the trade is neither a profit nor a loss, that
subsection applies so that company A is treated as having no
35Northern Ireland profit, no Northern Ireland loss, no
mainstream profit and no mainstream loss;

(b) where subsection (2) of that section applies so that company A’s
share of the profit of the trade is reduced, that subsection
applies so that any Northern Ireland profit, Northern Ireland
40loss, mainstream profit or mainstream loss of company A is
reduced by the same proportion.

(4) In section 1264 of CTA 2009 (loss-making period in which some
partners have profits)—

(a) where subsection (1) of that section applies so that company A’s
45share of the loss of the trade is neither a profit nor a loss, that
subsection applies so that company A is treated as having no
Northern Ireland profit, no Northern Ireland loss, no
mainstream profit and no mainstream loss;

Corporation Tax (Northern Ireland) BillPage 64

(b) where subsection (2) of that section applies so that company A’s
share of the loss of the trade is reduced, that subsection applies
so that any Northern Ireland profit, Northern Ireland loss,
mainstream profit or mainstream loss of company A is reduced
5by the same proportion.

CHAPTER 17 Excluded trades, excluded activities and back-office activities

Introductory
357X Introduction

(1) This Chapter makes provision—

(a) 10specifying trades that are “excluded trades” for the purposes of
this Part (see sections 357XA to 357XE), and

(b) specifying activities that are “excluded activities” for the
purposes of this Part (see sections 357XF and 357XG).

(2) This Chapter also contains—

(a) 15a power to alter the meaning of “excluded trade” or “excluded
activity” for the purposes of this Part (see section 357XH), and

(b) a power to make provision about the meaning of “back-office
activities” for the purposes of this Part (see section 357XI).

Excluded trades
357XA 20 Oil activities

(1) A trade is an “excluded trade” if it is a ring fence trade.

(2) In this section “ring fence trade” has the same meaning as in Part 8 (oil
activities) (see section 277).

357XB Lending and investment

(1) 25A trade is an “excluded trade” if it consists of or includes—

(a) a lending activity, or

(b) a relevant regulated activity.

(2) But a trade is not an “excluded trade” by virtue of subsection (1) where
it is carried on by an insurance company (within the meaning given by
30section 65 of FA 2012).

(3) In this section “lending activity” means—

(a) lending of money, including consumer credit, mortgage credit,
factoring (with or without recourse), and financing of
commercial transactions (including forfeiting),

(b) 35finance leasing (as lessor),

(c) issuing and administering means of payment,

(d) provision of guarantees or commitments to provide money,

(e) money transmission services,

(f) provision of alternative finance arrangements, or

Corporation Tax (Northern Ireland) BillPage 65

(g) other activities carried on in connection with activities falling
within any of paragraphs (a) to (f).

(4) In this section “relevant regulated activity” means an activity which is
a regulated activity for the purposes of FISMA 2000 by virtue of any of
5the following provisions of the Financial Services and Markets Act 2000
(Regulated Activities) Order 2001 (S.I. 2001/544S.I. 2001/544)—

(a) article 5 (accepting deposits),

(b) article 14 (dealing in investments as principal),

(c) article 21 (dealing in investments as agent),

(d) 10article 25 (arranging deals in investments),

(e) article 40 (safeguarding and administering investments), and

(f) article 61 (entering into regulated mortgage contracts).

357XC Investment management

(1) A trade is an “excluded trade” if it consists of or includes portfolio
15management, or risk management, in relation to—

(a) a UCITS, or

(b) an AIF.

(2) In subsection (1)—

(a) UCITS” has the meaning given in Article 1.2 of Directive 2009/
2065/EC of the European Parliament and of the Council;

(b) “AIF” has the meaning given in regulation 3 of the Alternative
Investment Fund Managers Regulations 2013 (S.I. 2013/1773S.I. 2013/1773).

357XD Insurance: long-term business

A trade is an “excluded trade” if it consists of or includes long-term
25business (within the meaning given by section 63(1) of FA 2012).

357XE Re-insurance trade

(1) A trade is an “excluded trade” if it consists of re-insurance.

(2) In this Part “re-insurance” includes retrocession.

Excluded activities
357XF 30 Re-insurance activity

The activity of effecting or carrying out re-insurance contracts is an
“excluded activity”.

357XG Exploration and exploitation of UK sector of continental shelf

(1) An activity is an “excluded activity” if it is—

(a) 35an exploration or exploitation activity, or

(b) an activity carried on in connection with exploration or
exploitation rights.

(2) In this section—

Powers
357XH Power to amend definition of “excluded trade” or “excluded activity”

(1) The Treasury may by regulations amend this Chapter so as to alter the
10meaning of “excluded trade” or “excluded activity” for the purposes of
this Part.

(2) Regulations under this section may only be made if a draft of the
statutory instrument containing them has been laid before, and
approved by a resolution of, the House of Commons.

(3) 15Regulations under this section—

(a) may make different provision for different purposes;

(b) may make incidental, supplemental, consequential and
transitional provision and savings.

357XI Power to make provision about meaning of “back-office activities”

(1) 20The Treasury may by regulations make provision about the meaning of
“back-office activities” for the purposes of this Part.

(2) Regulations under this section may, in particular—

(a) specify activities that are, or are not, back-office activities, or

(b) specify circumstances in which activities are, or are not, to be
25regarded as back-office activities.

(3) Regulations under this section—

(a) may make different provision for different purposes;

(b) may make incidental, supplemental, consequential and
transitional provision and savings.

2 30Capital allowances

Schedule 1 contains amendments of CAA 2001 in connection with Part 8B of CTA
2010 (as inserted by section 1).

3 Other amendments

In Schedule 2—

(a) 35Part 1 contains further amendments in connection with Part 8B of CTA 2010
(as inserted by section 1)
, and

(b) Part 2 contains consequential amendments.

4 Power to make further consequential amendments

(1) The Commissioners may by regulations made by statutory instrument make
40further provision consequential on any provision of this Act.

Corporation Tax (Northern Ireland) BillPage 67

(2) Regulations under this section—

(a) may make provision amending or modifying any provision of the
Taxes Acts (including any provision inserted by this Act),

(b) may make incidental, supplemental, transitional, transitory or saving
5provision, and

(c) may make different provision for different purposes.

(3) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of the House of Commons.

(4) In this section “the Taxes Acts” has the same meaning as in the Taxes
10Management Act 1970 (see section 118(1) of that Act).

5 Commencement

(1) Part 8B of CTA 2010 (as inserted by section 1) and the amendments made by
Schedules 1 and 2 have effect in accordance with this section.

(2) Any power of the Treasury or the Commissioners under Part 8B of CTA 2010,
15or under the amendments made by Schedules 1 and 2, to make regulations or
an order may be exercised on or after the day on which this Act is passed.

(3) The power of the Northern Ireland Assembly under section 357IA of CTA 2010
(power to set Northern Ireland rate) is exercisable in relation to—

(a) such financial year as the Treasury may by regulations made by
20statutory instrument appoint (“the appointed financial year”), and

(b) subsequent financial years.

(4) The other provisions of Part 8B of CTA 2010 and the amendments made by
Schedules 1 and 2 have effect in relation to accounting periods beginning on or
after the first day of the appointed financial year (“the commencement day”).

(5) 25Subsection (6) applies where a company or partnership has an accounting
period beginning before the commencement day and ending on or after that
day (“the straddling period”).

(6) For the purposes of Part 8B of CTA 2010 and the amendments made by
Schedules 1 and 2—

(a) 30so much of the straddling period as falls before the commencement
day, and so much of that period as falls on or after that day, are treated
as separate accounting periods, and

(b) any amounts brought into account for the purposes of calculating for
corporation tax purposes the profits of any trade of the company or
35partnership for the straddling period are apportioned to the two
separate accounting periods on such basis as is just and reasonable.

6 Interpretation and short title

(1) In this Act—

(2) This Act may be cited as the Corporation Tax (Northern Ireland) Act 2015.

Corporation Tax (Northern Ireland) BillPage 69

SCHEDULES

Section 2

SCHEDULE 1 Capital allowances

Part 1 5Introductory

1 CAA 2001 is amended as follows.

Part 2 Amendments of Part 1 of CAA 2001

2 After section 6 insert—

Chapter 1A

Trades attracting Northern Ireland rate of corporation tax

6A 10“NIRE company” and “Northern Ireland SME company”

In this Act—

6B “Northern Ireland firm” etc

(1) 20This section has effect for the purposes of this Act.

(2) “Northern Ireland firm” has the meaning given by section 357WA of
CTA 2010.

(3) If section 357WC of CTA 2010 (Northern Ireland profits etc of firm
determined under Chapter 6 of Part 8B of that Act) applies to a
25Northern Ireland firm for a chargeable period, the partnership is a
“Northern Ireland Chapter 6 firm” for any purpose for which that
section applies.

(4) If section 357WD of CTA 2010 (Northern Ireland profits etc of firm
determined under Chapter 7 of Part 8B of that Act) applies to a
30Northern Ireland firm for a chargeable period, the partnership is a

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