Corporation Tax (Northern Ireland) Bill (HC Bill 170)

Case 2

35The independent investment manager conditions, other than
Condition D in section 357LD(6) (the 20% rule), are met in relation to
the investment transaction.

(3) But if case 2 applies in relation to the investment transaction,
chargeable profits deriving from the transaction are to be disregarded
40only to the extent that they do not represent relevant disregarded
income of the company to which the investment manager or a person
connected with the investment manager has or has had any beneficial
entitlement.

(4) In subsection (3) “relevant disregarded income” and “beneficial
45entitlement” have the meanings given in section 357LF.

357LK Miscellaneous

(1) For the purposes of this Chapter a person is regarded as carrying out a
transaction on behalf of another if the person—

(a) undertakes the transaction, whether on behalf of or to the
5account of the other, or

(b) gives instructions for it to be so carried out by another.

(2) In the case of a person who acts as a broker or investment manager as
part only of a business, this Chapter has effect as if that part were a
separate business.

CHAPTER 6 10Northern Ireland profits and losses etc: SMEs

357M Introductory

(1) This Chapter applies to a company that is a Northern Ireland company
in an accounting period by virtue of the SME condition in section
357KA.

(2) 15In this Chapter—

(a) a reference to “the company” or “the accounting period” is to
the company or accounting period mentioned in subsection (1);

(b) a reference to “the trade” is to any qualifying trade carried on by
the company in the period.

(3) 20Section 357MA contains provision under which profits or losses of the
trade for the accounting period are—

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

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

(c) a combination of—

(i) 25profits or losses within paragraph (a), and

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

(4) Further provision under which profits or losses of the trade may be
Northern Ireland profits or losses of the trade, or mainstream profits or
losses of the trade, is contained in—

(a) 30Chapters 8 to 15 of this Part, and

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

(5) This Chapter has effect for the purposes of this Part.

357MA Northern Ireland profits or losses and mainstream profits or losses

(1) Where the trade is a qualifying trade by virtue of section 357KB(1)
35(trade other than excluded trade), the profits or losses of the trade for
the accounting period are Northern Ireland profits or Northern Ireland
losses of the trade for the period to the extent that they do not arise from
an excluded activity.

(2) Subsection (1)—

(a) 40does not apply in relation to any profits or losses of the trade
that form part of the Northern Ireland profits or losses of the
trade by virtue of any provision apart from this section, and

(b) is subject to any provision apart from this section under which
profits or losses of the trade are mainstream profits or losses of
the trade.

(3) Where the trade is a qualifying trade by virtue of section 357KB(2)
5(excluded trade with back-office activities), the profits, if any,
determined under section 357MB as back-office profits of the trade for
the accounting period are Northern Ireland profits of the trade for the
period.

(4) The profits or losses of the trade for the accounting period are
10mainstream profits or mainstream losses of the trade for the period to
the extent that they are not Northern Ireland profits or Northern
Ireland losses by virtue of subsection (1) or (3) or any provision apart
from this section.

(5) Subsection (4) does not apply in relation to any profits or losses of the
15trade that form part of the mainstream profits or losses of the trade by
virtue of any provision apart from this section.

357MB Profit imputed to back-office activities

(1) To determine for the purposes of section 357MA(3) the back-office
profits of the qualifying trade for the accounting period, take the
20following steps—

Step 1

Multiply each back-office deduction by the relevant percentage.

Step 2

Add together each amount calculated under step 1.

(2) 25In subsection (1)—

• “back-office deduction” means a deduction—

  (a)

  to which the company is entitled in calculating the
  profits of the trade for the period, and

  (b)

  which is in respect of back-office activities;

• 30“the relevant percentage” means 5%.

(3) The Treasury may by regulations amend subsection (2) so as to
substitute a different percentage for the percentage for the time being
specified there.

(4) Regulations under this section—

(a) 35may make different provision for different purposes (including,
in particular, different trades or different back-office activities);

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