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| Charge to tax on interest payable under the Tax Acts. |
34. - (1) Section 826 of the Taxes Act 1988 (interest on tax overpaid) shall be amended as follows.
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(2) In subsection (5) (interest on overpaid tax to be paid without deduction of income tax and not to be brought into account in computing profits or income)-
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(a) after "Interest paid under this section" there shall be inserted "(a)"; and |
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(b) after "and" there shall be inserted "(b)". |
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(3) At the beginning of the paragraph (b) formed by subsection (2)(b) above (interest not to be brought into account in computing profits or income) there shall be inserted "subject to subsection (5A) below,".
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(4) After subsection (5) there shall be inserted-
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"(5A) Paragraph (b) of subsection (5) above does not apply in relation to interest payable to a company within the charge to corporation tax."
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(5) The amendments made by subsections (3) and (4) above have effect in relation to interest payable by virtue of any paragraph of section 826(1) of the Taxes Act 1988 if the accounting period mentioned in that paragraph is one which ends on or after the day appointed under section 199 of the Finance Act 1994 for the purposes of Chapter III of Part IV of that Act (corporation tax self-assessment).
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| Further provision about interest payable under the Tax Acts. |
35. Schedule 4 to this Act (which makes further amendments relating to interest payable under the Tax Acts by or to companies) shall have effect.
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| Arrangements with respect to payment of corporation tax. |
36. - (1) The Board may enter into arrangements with some or all of the members of a group of companies for one of those members to discharge any liability of each of those members to pay corporation tax for the accounting periods to which the arrangements relate.
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(2) Any such arrangements-
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(a) may make provision in relation to cases where companies become or cease to be members of a group of companies; |
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(b) may make provision in relation to the discharge of liability to pay interest or penalties; |
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(c) may make provision in relation to the discharge of liability to pay any amount treated as corporation tax; |
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(d) may make provision for or in connection with the termination of the arrangements; |
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(e) may make such supplementary, incidental, consequential or transitional provision as is necessary or expedient for the purposes of the arrangements. |
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(3) Any such arrangements-
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(a) shall not affect the liability to corporation tax, or to pay corporation tax, of any company to which the arrangements relate; and |
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(b) shall not affect any other liability of any such company under the Tax Acts. |
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(4) For the purposes of this section a company and all its 51 per cent. subsidiaries form a group of companies and, if any of those subsidiaries have 51 per cent. subsidiaries, the group of companies includes them and their 51 per cent. subsidiaries, and so on.
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(5) The reference in subsection (2)(c) above to any amount treated as corporation tax is a reference-
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(a) to any amount due from a company under section 419 of the Taxes Act 1988 (loans to participators etc) as if it were an amount of corporation tax chargeable on the company; |
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(b) to any sum chargeable on a company under section 747(4)(a) of the Taxes Act 1988 (controlled foreign companies) as if it were an amount of corporation tax. |
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Gilt-edged securities |
| Abolition of periodic accounting. |
37. - (1) Section 51B of the Taxes Act 1988 (which enables provision to be made requiring tax on interest on gilt-edged securities to be accounted for periodically) shall cease to have effect.
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(2) In consequence of subsection (1) above, in paragraph 3 of Schedule 19AB to that Act (repayment of excessive provisional payments made on self-assessment), in sub-paragraph (1C) (as inserted by Schedule 34 to the Finance Act 1996)-
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(a) the word "or" shall be inserted at the end of paragraph (a); and |
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(b) paragraph (c) and the word "or" immediately preceding it shall be omitted. |
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(3) The preceding provisions of this section have effect in relation only to payments of interest falling due on or after such day as the Treasury may by order appoint.
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Rents and other receipts from land |
| Taxation of rents and other receipts from land. |
38. - (1) The provisions of Schedule 5 to this Act have effect with respect to tax on rents and other receipts from land.
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Part I contains amendments relating to the charge to tax under Schedule A or Case V of Schedule D on rents and other receipts from land. |
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Part II contains amendments about relief for losses incurred in a Schedule A business or overseas property business, and the relationship between such relief and other reliefs. |
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Part III contains minor and consequential amendments. |
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(2) So far as relating to income tax, the provisions of Parts I to III of that Schedule have effect for the year 1998-99 and subsequent years of assessment.
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(3) So far as relating to corporation tax, the provisions of Parts I to III of that Schedule come into force on 1st April 1998, subject to the transitional provisions in Part IV of the Schedule.
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| Land managed as one estate and maintenance funds for historic buildings. |
39. Sections 26 and 27 of the Taxes Act 1988 (deductions from rent: land managed as one estate and maintenance funds for historic buildings) shall cease to have effect-
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(a) for income tax purposes, on and after 6th April 2001; |
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(b) for corporation tax purposes, for accounting periods beginning on or after 1st April 2001. |
| Treatment of premiums as rent. |
40. - (1) Section 34 of the Taxes Act 1988 (treatment of premiums, etc. as rent) is amended as follows.
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(2) In subsection (1) for "becoming entitled when the lease is granted to" substitute "receiving when the lease is granted".
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(3) In subsection (4)-
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(a) in paragraph (a), for the words from "in computing" to "in lieu of rent" substitute "in computing the profits of the Schedule A business of which the sum payable in lieu of rent is by virtue of this subsection to be treated as a receipt"; and |
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(b) in paragraph (b), for "deemed to become due" substitute "deemed to be received". |
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(4) In subsection (5)-
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(a) in paragraph (a), for "tax chargeable by virtue of this subsection" substitute "the profits of the Schedule A business of which that sum is by virtue of this subsection to be treated as a receipt"; and |
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(b) in paragraph (b), for "deemed to become due" substitute "deemed to be received". |
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(5) The above amendments have effect in relation to amounts treated as received under section 34 of the Taxes Act 1988 on or after 17th March 1998.
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