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(a) after paragraph (aj) insert—

(ak) an amount of museums and galleries exhibition tax
credit paid to a company for an accounting
period,”, and

(b) 5in the words after paragraph (b), after “(aj)” insert “, (ak)”.

6 In Part 9D (certain claims for tax relief)—

(a) in the heading, for “or 15D” substitute “, 15D or 15E”, and

(b) in paragraph 83S (introduction), after sub-paragraph (f) insert—

(g) museums and galleries exhibition tax relief.”

10CAA 2001

7 In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit
the “and” at the end of paragraph (f) and after paragraph (g) insert , and

(h) Chapter 3 of Part 15E of that Act (museums and galleries
exhibition tax credits).”

15FA 2007

8 In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa)
(meaning of “corporation tax credit”), omit the “or” at the end of paragraph
(ivd) and after that paragraph insert—

(ive) a museums and galleries exhibition tax credit under
20Chapter 3 of Part 15E of that Act, or”.

CTA 2009

9 CTA 2009 is amended in accordance with paragraphs 10 to 14.

10 In section 104BA (restriction on claiming other tax reliefs), after subsection
(4) insert—

(5) 25For provision prohibiting an R&D expenditure credit being given
under this Chapter and relief being given under Chapter 3 of Part
15E (museums and galleries exhibition tax relief), see section
1218ZCG(2).”

11 In Part 8 (intangible fixed assets), in Chapter 10 (excluded assets), after
30section 808D insert—

808E Assets representing expenditure incurred in course of separate
exhibition trade

(1) This Part does not apply to an intangible fixed asset held by a
museums and galleries exhibition production company so far as the
35asset represents expenditure on an exhibition that is treated under
Part 15E as expenditure of a separate trade (see particularly sections
1218ZB and 1218ZBE).

(2) In this section—

  • “exhibition” has the same meaning as in Part 15E (see section
    401218ZAA);

  • “museums and galleries exhibition production company”
    means a company which, for the purposes of that Part, is the
    primary production company or a secondary production

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    company for an exhibition (see sections 1218ZAC and
    1218ZAD).”

12 In section 1040ZA (restriction on claiming other tax reliefs), after subsection
(4) insert—

(5) 5For provision prohibiting relief being given under this Part and
under Chapter 3 of Part 15E (museums and galleries exhibition tax
relief), see section 1218ZCG(2).”

13 In section 1310 (orders and regulations), in subsection (4), after paragraph
(eo) insert—

(ep) 10section 1218ZCC (EEA expenditure condition),

(eq) section 1218ZCF (amount of additional deduction),

(er) section 1218ZF (regulations about activities in relation to
exhibition),”.

14 In Schedule 4 (index of defined expressions), insert at the appropriate
15places—

“company tax return (in Part 15E) section 1218ZFA
“core expenditure (in Part 15E) section 1218ZCD
“costs, in relation to an exhibition (in Part 15E) section 1218ZBC
EEA expenditure (in Part 15E) section 1218ZCC(2)
EEA expenditure condition (in Part 15E) 20section 1218ZCC
“exhibition (in Part 15E) section 1218ZAA
“income, in relation to an exhibition (in Part 15E) section 1218ZBB
“museums and galleries exhibition tax relief (in Part
15E)
section 1218ZC(1)
“primary production company (in Part 15E) 25section 1218ZAC
“qualifying expenditure (in Part 15E) section 1218ZCG
“secondary production company (in Part 15E) section 1218ZAD
“separate exhibition trade (in Part 15E) section 1218ZB
“touring exhibition (in Part 15E) section 1218ZAB”.

30FA 2009

15 In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A
2010 and contains provision about the recovery of certain amounts of
interest paid by HMRC), in paragraph 2—

(a) in sub-paragraph (2), omit the “or” at the end of paragraph (h) and
35after paragraph (i) insert , or

(j) a payment of museums and galleries exhibition tax
credit under Chapter 3 of Part 15E of CTA 2009 for
an accounting period.”;

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(b) in sub-paragraph (4), for “(i)” substitute “(j)”.

CTA 2010

16 In Part 8B of CTA 2010 (trading profits taxable at Northern Ireland rate), in
section 357H(7) (introduction), after “Chapter 14A for provision about
5orchestra tax relief;” insert “Chapter 14B for provision about museums and
galleries exhibition tax relief;”.

17 In Part 8B of CTA 2010, after section 357UQ insert—

“CHAPTER 14B Museums and galleries exhibition tax relief
Introductory
357UR 10 Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15E of
CTA 2009 (museums and galleries exhibition tax relief) in relation to
expenditure incurred by a company in an accounting period in
which it is a Northern Ireland company.

(2) 15In this Chapter—

(a) “Northern Ireland expenditure” means expenditure incurred
in a trade to the extent that the expenditure forms part of the
Northern Ireland profits or Northern Ireland losses of the
trade;

(b) 20“the separate exhibition trade” has the same meaning as in
Part 15E of CTA 2009 (see section 1218ZB(3) of that Act);

(c) “qualifying expenditure” has the same meaning as in Chapter
3 of that Part (see section 1218ZCG of that Act).

(3) References in Part 15E of CTA 2009 to “museums and galleries
25exhibition tax relief” include relief under this Chapter.

Museums and galleries exhibition tax relief
357US Northern Ireland additional deduction

(1) In this Chapter “a Northern Ireland additional deduction” means so
much of a deduction under section 1218ZCE of CTA 2009 (claim for
30additional deduction) as is calculated by reference to qualifying
expenditure that is Northern Ireland expenditure.

(2) A Northern Ireland additional deduction forms part of the Northern
Ireland profits or Northern Ireland losses of the separate exhibition
trade.

357UT 35 Northern Ireland supplementary deduction

(1) This section applies where—

(a) a company is entitled under section 1218ZCE of CTA 2009 to
an additional deduction in calculating the profit or loss of the
separate exhibition trade in an accounting period,

(b) 40the company is a Northern Ireland company in the period,

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(c) the additional deduction is wholly or partly a Northern
Ireland additional deduction, and

(d) any of the following conditions is met—

(i) the company does not have a surrenderable loss in the
5accounting period;

(ii) the company has a surrenderable loss in the
accounting period, but does not make a claim under
section 1218ZCH of CTA 2009 (museums and
galleries exhibition tax credit claimable if company
10has surrenderable loss) for the period;

(iii) the company has a surrenderable loss in the
accounting period and makes a claim under that
section for the period, but the amount of Northern
Ireland losses surrendered on the claim is less than
15the Northern Ireland additional deduction.

(2) The company is entitled to make another deduction (“a Northern
Ireland supplementary deduction”) in respect of qualifying
expenditure.

(3) See section 357UU for provision about the amount of the Northern
20Ireland supplementary deduction.

(4) The Northern Ireland supplementary deduction—

(a) is made in calculating the profit or loss of the separate
exhibition trade, and

(b) forms part of the Northern Ireland profits or Northern
25Ireland losses of the separate exhibition trade.

(5) In this section “surrenderable loss” has the meaning given by section
1218ZCI of CTA 2009.

357UU Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357UT(2)
30about the amount of the Northern Ireland supplementary deduction.

(2) If the accounting period falls within only one financial year, the
amount of the Northern Ireland supplementary deduction is—


where—

  • 35A is the amount of the Northern Ireland additional deduction
    brought into account in the accounting period;

  • B is the amount of Northern Ireland losses surrendered in any
    claim under section 1218ZCH of CTA 2009 for the accounting
    period;

  • 40MR is the main rate for the financial year;

  • NIR is the Northern Ireland rate for the financial year.

(3) If the accounting period falls within more than one financial year, the
amount of the Northern Ireland supplementary deduction is
determined by taking the following steps.

  • 45Step 1

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  • Calculate, for each financial year, the amount that would be the
    Northern Ireland supplementary deduction for the
    accounting period if it fell within only that financial year (see
    subsection (2)).

  • 5Step 2

  • Multiply each amount calculated under step 1 by the proportion
    of the accounting period that falls within the financial year
    for which it is calculated.

  • Step 3

  • 10Add together each amount found under step 2.

357UV Museums and galleries exhibition tax credit: Northern Ireland
supplementary deduction ignored

For the purpose of determining the available loss of a company
under section 1218ZCI of CTA 2009 (amount of surrenderable loss)
15for any accounting period, any Northern Ireland supplementary
deduction made by the company in the period (and any Northern
Ireland supplementary deduction made in any previous accounting
period) is to be ignored.

Losses of separate exhibition trade
357UW 20 Restriction on use of losses before completion period

(1) Section 1218ZDA of CTA 2009 (restriction on use of losses before
completion period) has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the
separate exhibition trade in an accounting period preceding the
25completion period is, if the company is a Northern Ireland company
in that period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (2) and (3) of that section are
30to be read accordingly.

(3) Subsection (4) applies if a Northern Ireland company has, in an
accounting period preceding the completion period—

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

(b) 35both mainstream losses of the trade and Northern Ireland
profits of the trade.

(4) The company may make a claim under section 37 (relief for trade
losses against total profits) for relief for the losses mentioned in
subsection (3)(a) or (b).

(5) 40But relief on such a claim is available only—

(a) in the case of a claim for relief for Northern Ireland losses,
against mainstream profits of the trade of the same period;

(b) in the case of a claim for relief for mainstream losses, against
Northern Ireland profits of the trade of the same period.

(6) 45In this section “the completion period” has the same meaning as in
section 1218ZDA of CTA 2009 (see section 1218ZD(2) of that Act).

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357UX Use of losses in the completion period

(1) Section 1218ZDB of CTA 2009 (use of losses in the completion
period) has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the
5separate exhibition trade is, in relation to a loss made in a period in
which the company is a Northern Ireland company, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (2) and (4) of that section are
10to be read accordingly.

(3) The references in subsection (3) of that section to a loss made in the
separate exhibition trade in the completion period are, where the
company is a Northern Ireland company in the period, references
to—

(a) 15any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsection (4) of that section are to be read
accordingly.

(4) Subsection (4) of that section has effect, in relation to Northern
20Ireland losses, as if the reference to an additional deduction under
Chapter 3 of Part 15E of CTA 2009 included a reference to a Northern
Ireland supplementary deduction under this Chapter.

357UY Terminal losses

(1) Section 1218ZDC of CTA 2009 (terminal losses) has effect subject as
25follows.

(2) Where—

(a) a company makes an election under subsection (3) of that
section (election to treat terminal loss as loss brought forward
of different trade) in relation to all or part of a terminal loss,
30and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought
forward were to a Northern Ireland loss brought forward.

(3) Where—

(a) 35a company makes a claim under subsection (6) of that section
(claim to treat terminal loss as loss brought forward by
different company) in relation to part or all of a terminal loss,
and

(b) the terminal loss is a Northern Ireland loss,

40that subsection has effect as if the reference in it to a loss brought
forward were to a Northern Ireland loss brought forward.”

18 (1) Schedule 4 to CTA 2010 (index of defined expressions) is amended as
follows.

(2) In the entry for “Northern Ireland expenditure”—

(a) 45for “14A” substitute “14B”, and

(b) for “and 357UJ(2)” substitute “, 357UJ(2) and 357UR(2)”.

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(3) Insert at the appropriate places—

“qualifying expenditure (in Chapter 14B of Part
8B)
section 357UR(2)
“the separate exhibition trade (in Chapter 14B of
Part 8B)
section 357UR(2)
5

FA 2016

19 In Schedule 24 to FA 2016 (tax advantages constituting the grant of state aid),
in Part 1, in the table headed “Creative tax reliefs”, after the entry for
“Orchestra tax relief” insert—

“Museums and galleries
exhibition tax relief
10Part 15E of CTA 2009”

Part 3 Commencement

20 Any power to make regulations conferred on the Treasury by virtue of this
15Schedule comes into force on the day on which this Act is passed.

21 (1) The amendments made by the following provisions of this Schedule have
effect in relation to accounting periods beginning on or after 1 April 2017—

(a) Part 1, and

(b) in Part 2, paragraphs 2 to 15 and 19.

(2) 20Sub-paragraph (3) applies where a company has an accounting period
beginning before 1 April 2017 and ending on or after that date (“the
straddling period”).

(3) For the purposes of Part 15E of CTA 2009—

(a) so much of the straddling period as falls before 1 April 2017, and so
25much of that period as falls on or after that date, are separate
accounting periods, and

(b) any amounts brought into account for the purposes of calculating for
corporation tax purposes the profits of a trade for the straddling
period are apportioned to the two separate accounting periods on
30such basis as is just and reasonable.

22 (1) Section 4 of CT(NI)A 2015 (power to make consequential amendments) has
effect as if paragraphs 16 to 18 of this Schedule were contained in that Act.

(2) Section 5(4) to (6) of CT(NI)A 2015 (commencement) has effect as if—

(a) references to Part 8B of CTA 2010 were to that Part as amended by
35paragraphs 16 and 17 of this Schedule, and

(b) references to the amendments made by Schedules 1 and 2 to
CT(NI)A 2015 included the amendments made by paragraph 18 of
this Schedule.

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SCHEDULE 7 Section 25 Trading profits taxable at the Northern Ireland rate

Part 1 Amendments relating to SMEs

5Amendments of CTA 2010

1 CTA 2010 is amended as follows.

2 (1) Section 357H (introduction) is amended as follows.

(2) In subsection (5)—

(a) after “that is an SME” insert “and is a Northern Ireland employer”;

(b) 10for “that is not an SME” substitute that—

(a) is an SME that is not a Northern Ireland employer and
has made the requisite election, or

(b) is not an SME.”

3 (1) Section 357KA (meaning of “Northern Ireland company”) is amended as
15follows.

(2) In subsection (1)(b), for “the SME condition” substitute “the SME (Northern
Ireland employer) condition, the SME (election) condition”.

(3) In subsection (2), for “SME condition” substitute “SME (Northern Ireland
employer) condition”.

(4) 20After subsection (2) insert—

(2A) The “SME (election) condition” is that—

(a) the company is an SME in relation to the period,

(b) the company is not a Northern Ireland employer in relation
to the period,

(c) 25the company has a NIRE in the period,

(d) the company is not a disqualified close company in relation
to the period, and

(e) an election by the company for the purposes of this
subsection has effect in relation to the period.”

(5) 30In subsection (4), after the definition of “Northern Ireland employer”
insert—

  • “disqualified close company”, see section 357KEA;”.

(6) After subsection (3) insert—

(3A) An election for the purposes of subsection (2A)—

(a) 35must be made by notice to an officer of Revenue and
Customs,

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

(c) must be made before the end of the period of 12 months
40beginning with the end of the specified accounting period,
and

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(d) if made in accordance with paragraphs (a) to (c) has effect in
relation to the specified accounting period.”

4 (1) Section 357KE (Northern Ireland workforce conditions) is amended as
follows.

(2) 5In subsection (2)—

(a) omit the “and” at the end of paragraph (b), and

(b) at the end of paragraph (c) insert “, and

(d) in the case of a close company, or of a company which would
be a close company if it were UK resident, individuals who
10are participators in the company.”

(3) After subsection (7) insert—

(7A) In this section “participator” has the same meaning as in sections
1064 to 1067 (see sections 1068 and 1069).

(7B) In determining for the purposes of this section the amount of
15working time that is spent in any place by a participator in the
company, time spent by the participator in that place is to be
included where—

(a) the time is spent by the participator in providing services to
a person other than the company (“the third party”), and

(b) 20condition A or B is met.

(7C) Condition A is that the provision of the services results in a payment
being made (whether directly or indirectly) to the company by—

(a) the third party, or

(b) a person connected with the third party.

(7D) 25Condition B is that—

(a) the company holds a right that it acquired (whether directly
or indirectly) from the participator, and

(b) any payment in connection with that right is made (whether
directly or indirectly) to the company by—

(i) 30the third party, or

(ii) a person connected with the third party.

(7E) Section 1122 (connected persons) applies for the purposes of this
section.”

5 After section 357KE insert—

35“Meaning of “disqualified close company”

357KEA “Disqualified close company”

(1) A company is a “disqualified close company” in relation to a period
if—

(a) the company is a close company, or would be a close
40company if it were UK resident, at any time in the period, and

(b) conditions A and B are met.

(2) Condition A is that the company has a NIRE in the period as a result
of tax-avoidance arrangements.

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(3) Condition B is that—

(a) 50% or more of the working time that is spent in the United
Kingdom during the period by members of the company’s
workforce is working time spent by participators in the
5company otherwise than in Northern Ireland, or

(b) 50% or more of the company’s workforce expenses that are
attributable to working time spent in the United Kingdom
during the period by members of the company’s workforce
are attributable to working time spent by participators in the
10company otherwise than in Northern Ireland.

(4) For the purposes of this section “tax avoidance arrangements” means
arrangements the sole or main purpose of which is to secure that any
profits or losses of the company for the period are Northern Ireland
profits or losses.

(5) 15In subsection (4) “arrangements” includes any agreement,
understanding, scheme, transaction or series of transactions
(whether or not legally enforceable).

(6) The following provisions apply for the purposes of this section as
they apply for the purposes of section 357KE (Northern Ireland
20workforce conditions)—

(a) subsections (2) to (5) and (7A) to (7E) of that section;

(b) regulations made under that section.

(7) In its application by virtue of subsection (6), subsection (5) of section
357KE has effect as if the reference in it to subsection (1)(b) of that
25section were to subsection (3)(b) of this section.”

6 In the heading of Chapter 6 of Part 8B, at the end insert “that are Northern
Ireland employers”.

7 In section 357M (Chapter 6: introductory), in subsection (1), for “SME
condition” substitute “SME (Northern Ireland employer) condition”.

8 30In the heading of Chapter 7 of Part 8B, after “losses etc:” insert “SMEs that
are not Northern Ireland employers and”.

9 In section 357N (Chapter 7: introductory), in subsection (1), after “by virtue
of” insert “the SME (election) condition or”.

10 (1) Section 357OB (Northern Ireland intangibles credits and debits: SMEs) is
35amended as follows.

(2) In the heading, at the end, insert “that are Northern Ireland employers”.

(3) In subsection (1)(a), for “SME condition” substitute “SME (Northern Ireland
employer) condition”.

11 (1) Section 357OC (Northern Ireland intangibles credits and debits: large
40companies) is amended as follows.

(2) In the heading, after “debits:” insert “SMEs that are not Northern Ireland
employers and”.

(3) In subsection (1), after “by virtue of” insert “the SME (election) condition or”.