Finance Bill (HC Bill 116)

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96 After section 357JH insert—

“Loss relief in relation to Northern Ireland profits and losses: Part 5A

357JHA Availability of relief

(1) The reference in section 188BB(1)(a) (group relief for carried-forward
5losses: surrendering of carried-forward losses and other amounts) to
a loss carried forward to an accounting period of a company under
section 45A(4) is, where a company has Northern Ireland losses or
mainstream losses carried forward to an accounting period under
that section, a reference to those Northern Ireland losses or
10mainstream losses.

(2) Where—

(a) a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is a Northern Ireland loss, and

(b) 15the profits against which the relief is claimed include some
profits that are Northern Ireland profits and some that are
not,

the relief in relation to that surrenderable amount is given first, so far
as possible, against the Northern Ireland profits.

(3) 20Where—

(a) a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is not a Northern Ireland loss, and

(b) the profits against which the relief is claimed include some
25profits that are Northern Ireland profits and some that are
not,

the relief in relation to that surrenderable amount is given first, so far
as possible, against the profits that are not Northern Ireland profits.

357JHB Restriction on deductions

(1) 30Subsection (2) applies where—

(a) a company makes a claim for group relief for carried-forward
losses under Part 5A in relation to a surrenderable amount
that is a Northern Ireland loss (“the loss”),

(b) the profits against which the relief is claimed include profits
35that are not Northern Ireland profits, and

(c) at any time during the accounting period for which the relief
is claimed (“the profit period”), the Northern Ireland rate is
lower than the main rate.

(2) In section 188CK(2) and (4) (amount of deduction)—

(a) 40the reference in paragraph (a) to “an amount equal to” the
surrendering company’s surrenderable amounts is, so far as
those surrenderable amounts comprise the loss, to the
restricted deduction for the loss, as determined under section
357JJ (restricted deduction where Northern Ireland rate
45lower than main rate);

(b) the reference in paragraph (b) to “an amount equal to” part of
the surrendering company’s surrenderable amounts is, so far

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as that part comprises the loss, to the restricted deduction for
the loss, as determined under section 357JJ.

357JHC Modifications of Chapter 4 of Part 5A

(1) Chapter 4 of Part 5A (limitations on group relief for carried-forward
5losses: claims under section 188CB) has effect, in relation to a claim
under section 188CB in relation to surrenderable amounts that
include a Northern Ireland loss, subject to the following provisions
of this section.

(2) In section 188DB(1) (limitation on amount of group relief for carried-
10forward losses applying to all claims under section 188CB)—

(a) paragraphs (a) and (b) are treated as imposing separate
limits;

(b) the limit in paragraph (a) on the amount of group relief for
carried-forward losses to be given on a claim under section
15188CB has effect as a limit on the amount of losses and other
surrenderable amounts in relation to which relief is to be
given on the claim;

(c) the limit in paragraph (b) on the amount of group relief for
carried-forward losses to be given on a claim under section
20188CB has effect as a limit on the amount of the deduction to
be made as a result of the claim.

(3) In section 188DC(6)(b) (unused part of the surrenderable amounts),
and in section 188DF(2) so far as it applies in relation to section
188DC, references to the amount of group relief for carried-forward
25losses given on a claim are to the amount of losses and other
surrenderable amounts in relation to which relief is given on the
claim.

(4) In section 188DE(4)(b) (previously claimed group relief for carried-
forward losses), and in section 188DF(2) so far as it applies in relation
30to section 188DE, references to the amount of group relief for carried-
forward losses given on a claim are to the amount of the deduction
made as a result of the claim.

(5) In section 188DH (limitation on group relief for carried-forward
losses where claim under section 188CB is based on consortium
35condition 1), the limit in subsection (2) on the amount of group relief
for carried-forward losses to be given on a claim has effect as a limit
on the amount of the deduction to be made as a result of the claim.

(6) In section 188DL (limitation on group relief for carried-forward
losses where claim under section 188CB is made by member of a
40group of companies)—

(a) the reference in subsection (3)(a) to the maximum amount of
group relief for carried-forward losses that could be claimed
by the claimant company has effect as a reference to the
maximum amount of the deduction that could be made as a
45result of claims by the claimant company, and

(b) the reference in subsection (3)(b) to the maximum amount of
group relief under Part 5 that could be claimed by the
claimant company has effect as a reference to the maximum
amount of the deduction that could be made as a result of
50claims by the claimant company.

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357JHD Modifications of Chapter 5 of Part 5A

(1) Chapter 5 of Part 5A (limitations on group relief for carried-forward
losses: claims under section 188CC) has effect, in relation to a claim
under section 188CC in relation to surrenderable amounts that
5include a Northern Ireland loss, subject to the following provisions
of this section.

(2) In section 188EB(1) (limitation on amount of group relief for carried-
forward losses applying to all claims under section 188CC)—

(a) paragraphs (a), (b) and (c) are treated as imposing separate
10limits;

(b) the limit in paragraph (a) on the amount of group relief for
carried-forward losses to be given on a claim under section
188CC has effect as a limit on the amount of losses and other
surrenderable amounts in relation to which relief is to be
15given on the claim;

(c) the limits in paragraphs (b) and (c) on the amount of group
relief for carried-forward losses to be given on a claim under
section 188CC have effect as limits on the amount of the
deduction to be made as a result of the claim.

(3) 20In section 188EC(6) and (8)(b) (unused part of the surrenderable
amounts attributable to the specified-loss making period), and in
section 188EG(2) so far as it applies in relation to section 188EC,
references to the amount of group relief for carried-forward losses
given on a claim are to the amount of losses and other surrenderable
25amounts in relation to which relief is given on the claim.

(4) In section 188EE(4)(b) (previously claimed group relief for carried-
forward losses), and in section 188EG(2) so far as it applies in relation
to section 188EE, references to the amount of group relief for carried-
forward losses given on a claim are to the amount of the deduction
30made as a result of the claim.

(5) In section 188EI (condition 4: companies in link company’s group),
the limit in subsections (2) and (3) on the amount of group relief for
carried-forward losses to be given on a claim has effect as a limit on
the amount of the deduction to be made as a result on the claim.

(6) 35In section 188EK (condition 3 or 4: surrendering company in group
of companies), the reference in subsection (4) to the maximum
amount of group relief for carried-forward losses that could be given
has effect as a reference to the maximum amount of losses and other
surrenderable amounts in relation to which relief could be given.”

97 40In section 357JJ (restricted deduction: Northern Ireland rate lower than main
rate)—

(a) in subsection (1) for “357JC(2), 357JE(2) or 357JG(2)” substitute
“357JC(2) or (4), 357JG(2) or 357JHB(2)”, and

(b) in subsection (6) for “section 357JC(1), 357JE(1) or 357JG(1)”
45substitute “357JC(1) or (3), 357JG(1) or 357JHB(1)”.

98 In section 357RF (losses of film trade: restriction on use of losses while film
is in production) in subsection (2) for “subsection (2)” substitute
“subsections (2) and (3)”.

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99 In section 357RG (losses of film trade: use of losses in later periods) in
subsection (3) after “subsections (5)” insert “, (5A)”.

100 In section 357SF (losses of television programme trade: restriction on use of
losses while programme in production) in subsection (2) for “subsection (2)”
5substitute “subsections (2) and (3)”.

101 In section 357SG (losses of television programme trade: use of losses in later
periods) in subsection (3) after “subsections (5)” insert “, (5A)”.

102 In section 357TF (losses of video game trade: restriction on use of losses
while video game in development) in subsection (2) for “subsection (2)”
10substitute “subsections (2) and (3)”.

103 In section 357TG (losses of video game trade: use of losses in later periods)
in subsection (3) after “subsections (5)” insert “, (5A)”.

104 In section 357UF (losses of theatrical trade: restriction on use of losses before
completion period) in subsection (2) for “subsection (2)” substitute
15“subsections (2) and (3)”.

105 In section 357UO (losses of orchestral trade: restriction on use of losses
before completion period) in subsection (2) for “subsection (2)” substitute
“subsections (2) and (3)”.

Part 11 20Minor and consequential amendments

ICTA

106 (1) Section 826 of ICTA (interest on tax overpaid) is amended as follows.

(2) After subsection (7A) insert—

(7AA) In any case where—

(a) 25a company ceases to carry on a trade in an accounting period
(“the terminal period”),

(b) as a result of a claim under section 45F of CTA 2010, the
whole or any part of a loss made in the trade is relieved for
the purposes of corporation tax against profits (of whatever
30description) of an earlier accounting period (“the earlier
period”) which does not fall wholly within the period of 12
months immediately preceding the terminal period, and

(c) a repayment falls to be made of corporation tax paid for the
earlier period or of income tax in respect of a payment
35received by the company in that accounting period,

then, in determining the amount of interest (if any) payable under
this section on the repayment referred to in paragraph (c) above, no
account shall be taken of so much of the amount of that repayment
as falls to be made as a result of the claim under section 45F, except
40so far as concerns interest for any time after the date on which any

corporation tax for the terminal period became (or, as the case may
be, would have become) due and payable, as mentioned in
subsection (7D) below).”

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(3) In subsection (7D) (meaning of references to the date on which corporation
tax became payable) after “(7A),” insert “(7AA),”.

(4) In subsection (7E) (power conferred by section 59E of TMA 1970 not to
include power to change the meaning of references to the date on which
5corporation tax became payable) after “(7A),” insert “(7AA)”.

FA 1998

107 Schedule 18 to FA 1998 (company tax returns, assessments and related
matters) is amended in accordance with paragraphs 108 to 122.

108 In paragraph 61(1)(c) (consequential claims etc arising out of certain
10Revenue amendments or assessments), in the words in brackets, after
“relief” insert “or group relief for carried-forward losses”.

109 In the heading of Part 8 (claims for group relief) at the end insert “and group
relief for carried-forward losses”.

110 For paragraph 66 (introduction to Part 8) substitute—

66 (1) 15This Part of this Schedule applies to—

(a) claims for group relief under Part 5 of the Corporation Tax
Act 2010, and

(b) claims for group relief for carried-forward losses under
Part 5A of that Act.

(2) 20In this Part of this Schedule (except where otherwise indicated)—

(a) references to “relief” are to either of those forms of relief,
and

(b) references to “a claim” are to a claim for either of those
forms of relief.”

111 25In paragraph 67 (claim to be included in company tax return) omit “for
group relief”.

112 (1) Paragraph 68 (content of claims) is amended as follows.

(2) In sub-paragraph (1), in the words before paragraph (a), omit “for group
relief”.

(3) 30After sub-paragraph (4) insert—

(5) A claim for group relief for carried-forward losses made under
section 188CB of the Corporation Tax Act 2010 must also state
whether or not there is a company mentioned in sub-paragraph (6)
that was not resident in the United Kingdom in either or both of
35the following periods—

(a) the accounting period of the surrendering company to
which the claim relates,

(b) the corresponding accounting period of the claimant
company.

(6) 40Those companies are the claimant company, the surrendering
company and any other company by reference to which—

(a) the claimant company and the surrendering company are
members of the same group,

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(b) consortium condition 1 in section 188CF or consortium
condition 2 in section 188CG of the Corporation Tax Act
2010 is satisfied in the case of the claimant company and
the surrendering company.

(7) 5A claim for group relief for carried forward-losses made under
section 188CC of the Corporation Tax Act 2010 must also state
whether or not there is a company mentioned in sub-paragraph (8)
that was not resident in the United Kingdom in any or all of the
following periods—

(a) 10the specified loss-making period of the surrendering
company,

(b) the accounting period of the surrendering company to
which the surrender relates,

(c) the accounting period of the claimant company that
15corresponds with the period mentioned in paragraph (b).

(8) Those companies are the claimant company, the surrendering
company and any other company by reference to which
consortium condition 3 in section 188CH or consortium condition
4 in section 188CI is satisfied in the case of the claimant company
20and the surrendering company.”

113 (1) Paragraph 69 (claims for more or less than the amount available for
surrender) is amended as follows.

(2) In subsection (1) omit “for group relief”.

(3) In subsection (3), in the first step, after “Part 5” insert “or (as the case may be)
25Part 5A”.

114 (1) Paragraph 70 (consent to surrender) is amended as follows.

(2) For sub-paragraph (1) substitute—

(1) In accordance with Requirement 1 in section 130(2), 135(2),
188CB(3) or (as the case may be) 188CC(3) of the Corporation Tax
30Act 2010, a claim requires the consent of the surrendering
company.”

(3) In sub-paragraph (4) omit “for group relief”.

(4) In sub-paragraph (6)—

(a) after “means” insert

(a) 35”,

(b) at the end insert— “,

(b) a claim for group relief for carried-forward losses
under section 188CB of that Act based on
consortium condition 1 or 2 (see Requirement 3 in
40that section), and

(c) a claim for group relief for carried-forward losses
under section 188CC of that Act based on
consortium condition 3 or 4 (see Requirement 3 in
that section).

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115 In Paragraph 71 (notice of consent) after sub-paragraph (1) insert—

(1A) Notice of consent given in respect of a claim for carried-forward
losses made under section 188CC of the Corporation Tax Act 2010
must also state which accounting period of the surrendering
5company is the specified loss-making period.

116 After paragraph 71 insert—

“Notice of consent: additional requirements where claim is for group relief for carried-
forward losses

71A (1) 10Where notice of consent by the surrendering company is given in
respect of a claim for carried-forward losses, the notice must
comply with the additional requirements in this paragraph.

Otherwise the notice is ineffective.

(2) The notice must identify the particular losses and other amounts
15carried forward to the surrender period that are to be treated as
surrendered in satisfaction of the claim.

(3) The notice must identify a loss or other amount by specifying—

(a) the provision of the Corporation Tax Act 2009 or the
Corporation Tax Act 2010 under which it was carried
20forward to the surrender period, and

(b) in a case where the surrendering company is owned by a
consortium, the accounting period of the surrendering
company to which the loss or other amount is attributable.

(4) Section 153 of the Corporation Tax Act 2010 (companies owned by
25consortiums) applies for the purposes of this paragraph.”

117 (1) Paragraph 72 (notice of consent requiring amendment of return) is amended
as follows.

(2) For sub-paragraph (1) substitute—

(1) Where notice of consent by the surrendering company relates to a
30loss or other amount in respect of which corporation tax relief has
been given to the company for any accounting period, the
company must at the same time amend its company tax return for
that accounting period so as to reflect the notice of consent.”

(3) Omit sub-paragraph (2).

(4) 35In sub-paragraph (3) omit “or (2)”.

(5) In sub-paragraph (4) omit “or (2)”.

118 (1) Paragraph 73 (withdrawal or amendment of claim) is amended as follows.

(2) In sub-paragraph (1) omit “for group relief”.

(3) In sub-paragraph (2) omit “for group relief”.

119 (1) 40Paragraph 74 (time limit for claims) is amended as follows.

(2) In sub-paragraph (1), in the words before paragraph (a), omit “for group
relief”.

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(3) In sub-paragraph (2) omit “for group relief”.

(4) In sub-paragraph (3) omit “for group relief”.

(5) In sub-paragraph (4) omit “for group relief” in both places those words
occur.

120 (1) 5Paragraph 75A (assessment on other claimant companies) is amended as
follows.

(2) In sub-paragraph (2) omit “group”.

(3) In sub-paragraph (6) omit “for group relief”.

121 (1) Paragraph 76 (assessment to recover excessive relief) is amended as follows.

(2) 10In the italic heading omit “group”.

(3) In sub-paragraph (1) omit “group”.

122 (1) Paragraph 77 (joint amended returns) is amended as follows.

(2) In sub-paragraph (1)—

(a) in paragraph (a) omit “for group relief”, and

(b) 15in paragraph (b) omit “group” in the second and third places that
word occurs.

(3) In sub-paragraph (3), in paragraph (a), omit “for group relief”.

CAA 2001

123 CAA 2001 is amended as follows.

124 (1) 20Section 212Q (restrictions on capital allowance buying when there are
postponed allowances) is amended as follows.

(2) In subsection (4) after “37,” insert “45A,”.

(3) In subsection (6)—

(a) after “may not be set off” insert “by a company (“the claimant
25company”)”,

(b) after “CTA 2010” insert “or group relief for carried forward losses in
accordance with Part 5A of CTA 2010”, and

(c) omit “by a company (“the claimant company”)”.

125 In section 138 (deferment of balancing charge arising when there is a
30disposal event in respect of a ship: limit on amount of deferral) in subsection
(2)(b) after “45” insert “, 45A or 45B”.

126 In Schedule A1 (first-year tax credits) in paragraph 20 (list of provisions to
which restriction on carrying forward losses applies) in paragraph (a) for
“section 45” substitute “sections 45, 45A and 45B”.

35Energy Act 2004

127 In section 27 of the Energy Act 2004 (tax exemption for NDA activities) in
subsection (1)(b) for the words from “relieved” to the end substitute

(i) relieved under section 37, 45, 45A, 45B or 45F of the
Corporation Tax Act 2010 (relief for trading losses),

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(ii) surrendered under Part 5 of that Act (group relief), or

(iii) surrendered under Part 5A of that Act (group relief
for carried-forward losses).”

CTA 2009

128 5CTA 2009 is amended as follows.

129 In section 39(3) (losses of mines, quarries and other concerns)—

(a) omit “and”, and

(b) after “(group relief)” insert “and Part 5A of that Act (group relief for
carried forward losses)”.

130 (1) 10Section 364 (group relief claims involving impaired or released consortium
debts) is amended as follows.

(2) In subsection (4) at the end insert , and

  • “group relief” means—

    (a)

    group relief under Part 5 of CTA 2010 (see section
    1597(2) of that Act), and

    (b)

    group relief for carried-forward losses under Part 5A
    of CTA 2010 (see section 188AA(4) of that Act).”

(3) In subsection (5) for “or 144” substitute “, 144 or 188DH”.

131 In section 371 (group relief claims involving impaired or released
20consortium debts: interpretation) for the definition of “group relief”
substitute—

  • “group relief” has the meaning given by section 364(4),”.

132 In section 387 (treatment of deficit on basic life assurance and general
annuity business: introduction) in subsection (1) for “Chapter 16” substitute
25“Chapters 16 and 16A”.

133 (1) Section 1048 (treatment of deemed trading loss under section 1045) is
amended as follows.

(2) In subsection (1) at the end insert “(“the deemed loss-making period”)”.

(3) In subsection (3)—

(a) 30before paragraph (a) insert—

(za) the deemed loss-making period begins before 1 April
2017”,

(b) in paragraph (a) for “the accounting period” substitute “the deemed
loss-making period”.

(4) 35After subsection (4) insert—

(4A) Subsection (4B) applies if—

(a) the deemed loss-making period begins on or after 1 April
2017,

(b) the company—

(i) 40begins to carry on a trade in the deemed loss-making
period which it continues to carry on in the following
accounting period, or

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(ii) begins to carry on a trade in an accounting period
after the deemed-loss making period, and

(c) the trade is derived from the research and development in
relation to which the relief mentioned in subsection (1) was
5obtained.

(4B) In that case, so far as—

(a) the company has not obtained relief in respect of the trading
loss under any other provision, and

(b) the loss has not been surrendered under Part 5 of CTA 2010
10(group relief) (surrender of relief to group or consortium
members),

the trading loss is to be treated as if it were a loss of that trade
brought forward under the relevant provision (see subsection (4C))
to the relevant period (see subsection (4D).

(4C) 15In subsection (4B) “the relevant provision” is—

(a) section 45A(4) of CTA 2010 if—

(i) the trade is not a ring fence trade within the meaning
of Part 8 of CTA 2010 (see section 277 of that Act), and

(ii) relief under section 37 of CTA 2010 would not be
20unavailable by reason of section 44 of that Act for a
loss (assuming there was one) made in the trade in the
relevant period (see subsection (4D), and

(b) section 45B(2) of CTA 2010 if either of the conditions in
paragraph (a) is not met.

(4D) 25In subsection (4B) and (4C) “the relevant period” means—

(a) in a case where the company began the trade in the deemed
loss-making period and continued to carry on the trade in the
following accounting period, that following accounting
period, and

(b) 30in a case where the company began the trade in an accounting
period after the deemed loss-making period, the accounting
period in which the company began the trade.”

(5) In subsection (5) for “Subsection (4) is” substitute “Subsections (4) and (4B)
are”.

134 35In section 1056 (amount of trading loss which is “unrelieved”)—

(a) in subsection (2)(c) after “Part 5” insert “or Part 5A”, and

(b) in subsection (3)(a) after “45” insert “, 45A or 45B”.

135 In section 1062(2) (restriction on losses carried forward where R&D tax
credit claimed)—

(a) 40for “section 45” substitute “sections 45, 45A and 45B”, and

(b) omit “trading” in the second place that word occurs.

136 In section 1116 (meaning of “the actual reduction in tax liability”) in
subsection (4) after “Part 5” insert “or Part 5A”.

137 In section 1153 (amount of loss which is “unrelieved”)—

(a) 45in subsection (1)(c) after “Part 5” insert “or Part 5A”, and

(b) in subsection (2)(a) after “45” insert “, 45A, 45B”.