|
| |
|
(4) | For subsection (5) substitute— |
| |
| |
“qualifying income” has the same meaning as in section 628 of |
| |
| |
“resident”, in relation to the trustees of a trust, shall be |
| 5 |
construed in accordance with section 110 of the Finance Act |
| |
| |
512 | Omit section 45 (loans to charities). |
| |
513 (1) | Amend section 46 (exemption for small trades etc.) as follows. |
| |
(2) | In subsection (1) for the words from the beginning to “shall be granted,” |
| 10 |
| |
“(1) | Subject to subsections (2) and (2A) below, exemption— |
| |
| |
(i) | under Part 2 of ITTOIA 2005 in respect of a trade |
| |
carried on wholly or partly in the United Kingdom, or |
| 15 |
(ii) | under or by virtue of any provision to which section |
| |
836B of the Taxes Act 1988 applies, or |
| |
(b) | from corporation tax under Case I or VI of Schedule D, |
| |
| |
(3) | For subsection (2) substitute— |
| 20 |
“(2) | Exemption shall not be granted under subsection (1) above in respect |
| |
of income which is chargeable to— |
| |
(a) | income tax under or by virtue of any provision to which |
| |
section 836B of the Taxes Act 1988 applies, or |
| |
(b) | corporation tax under Case VI of Schedule D, |
| 25 |
| by virtue of any of the provisions mentioned in subsection (2A). |
| |
| |
(a) | sections 214, 547(1)(b), 703, 776, 788, 790 or 804 of the Taxes |
| |
| |
(b) | paragraph 52(4) of Schedule 18 to the Finance Act 1998; |
| 30 |
(c) | Chapter 9 of Part 4, and Chapter 5 of Part 5, of ITTOIA 2005; |
| |
| |
(d) | any other enactment specified in an order made by the |
| |
| |
(4) | In subsection (6), in the definition of “income”— |
| 35 |
(a) | after “means” insert “— |
| |
(a) | any profits or other income or gains — |
| |
(i) | which are chargeable to income tax under Part |
| |
2 of ITTOIA 2005 in respect of a trade carried |
| |
on wholly or partly in the United Kingdom, or |
| 40 |
(ii) | which are chargeable to income tax under or |
| |
by virtue of any provision to which section |
| |
836B of the Taxes Act 1988 applies, |
| |
| and which (in either case) are not, apart from this |
| |
section, exempted from income tax chargeable under |
| 45 |
or by virtue of that Part or provision, or |
| |
|
| |
|
| |
|
| |
(b) | after “chargeable to” insert “corporation”. |
| |
514 | Omit section 84 (exemption of payments under New Deal 50plus). |
| |
515 | Omit section 85 (exemption of payments under Employment Zones |
| |
| 5 |
516 | Omit section 87 (treatment of certain telecommunication rights). |
| |
517 | In section 143(2) (power to provide incentives to use electronic |
| |
communications) for “purposes of the Tax Acts” substitute “corporation tax |
| |
| |
518 | In section 155 (interpretation) at the end insert “and “ITTOIA 2005” means |
| 10 |
the Income Tax (Trading and Other Income) Act 2005”. |
| |
519 | In Schedule 12 (provision of services through an intermediary), in |
| |
paragraphs 17(1) and 18(1), for “tax purposes” substitute “corporation tax |
| |
| |
520 | In Schedule 15 (the corporate venturing scheme), in paragraph 99(3), for |
| 15 |
“Chapter 1A of Part XV of the Taxes Act 1988 (see section 660G(1) and (2))” |
| |
substitute “Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act)”. |
| |
521 | In Schedule 22 (tonnage tax), in paragraph 144(3), for “Chapter 1A of Part XV |
| |
of the Taxes Act 1988 (see section 660G(1) and (2) of that Act)” substitute |
| |
“Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act)”. |
| 20 |
522 | Omit Schedule 23 (treatment of certain telecommunication rights). |
| |
Capital Allowances Act 2001 (c.2) |
| |
523 | The Capital Allowances Act 2001 is amended as follows. |
| |
524 | In section 4 (capital expenditure) for subsection (5) substitute— |
| |
“(5) | Subsection (4) does not apply to any expenditure or sum in the case |
| 25 |
of which a deduction of income tax falls or may fall to be so made as |
| |
a result of section 595(2) of ITTOIA 2005 or section 524(3)(b) of ICTA |
| |
(receipts from sale of patent rights by person not resident in the UK: |
| |
income and corporation tax).” |
| |
525 (1) | Amend section 15 (qualifying activities) as follows. |
| 30 |
| |
(a) | in paragraph (b) for “Schedule A” substitute “property”, |
| |
(b) | in paragraph (f) after “listed in” insert “section 12(4) of ITTOIA 2005 |
| |
| |
(3) | In subsection (3)(a) for “Schedule A” substitute “property”. |
| 35 |
526 (1) | Amend section 16 (ordinary Schedule A businesses) as follows. |
| |
(2) | For ““ordinary Schedule A” substitute ““ordinary property”. |
| |
(3) | For “means a Schedule A business” substitute “means a UK property |
| |
business, or a Schedule A business,”. |
| |
(4) | In the side-note for “Schedule A” substitute “property”. |
| 40 |
|
| |
|
| |
|
527 (1) | Amend section 17 (furnished holiday lettings businesses) as follows. |
| |
(2) | In subsection (1) for “a Schedule A business in so far” to the end substitute |
| |
“a UK property business, or a Schedule A business, which consists in, or so |
| |
far as it consists in, the commercial letting of furnished holiday |
| |
| 5 |
(3) | For subsection (3) substitute— |
| |
“(3) | For the purposes of income tax the “commercial letting of furnished |
| |
holiday accommodation” has the same meaning as it has for the |
| |
purposes of Chapter 6 of Part 3 of ITTOIA 2005. |
| |
| For the purposes of corporation tax the “commercial letting of |
| 10 |
furnished holiday accommodation” has the meaning given by |
| |
| |
528 | In section 20(1) (employments and offices) for “section 314 of ICTA” |
| |
substitute “section 15 of ITTOIA 2005”. |
| |
529 | In section 23(2) (expenditure unaffected by sections 21 and 22) before “40D” |
| 15 |
insert “143 of ITTOIA 2005 or section”. |
| |
530 | In section 28(2) (thermal insulation of industrial buildings) for “Schedule A” |
| |
| |
531 | In section 33(8)(b) (personal security) for “Schedule A” substitute |
| |
| 20 |
532 | In section 35(1)(a) (expenditure on plant or machinery for use in dwelling- |
| |
house not qualifying expenditure in certain cases) for “Schedule A” |
| |
| |
533 | In section 38(a) (production of animals etc)— |
| |
(a) | after “to which” insert “section 30 or Chapter 8 of Part 2 of ITTOIA |
| 25 |
| |
(b) | after “purposes of” insert “Part 2 of ITTOIA 2005 or”, |
| |
534 (1) | Amend section 63 (cases in which disposal value is nil) as follows. |
| |
(2) | In subsection (2)(c) after “within the meaning of” insert “section 110 of |
| |
| 30 |
(3) | In subsection (3)(b) for “Schedule A” substitute “property”. |
| |
(4) | In subsection (4) after “to be read with” insert “section 109 of ITTOIA 2005 |
| |
| |
535 (1) | Amend section 106 (the designated period) as follows. |
| |
(2) | In subsection (3)(b) for the words from “the qualifying activity” to the end |
| 35 |
| |
(i) | there was a change in the persons carrying on the |
| |
qualifying activity which did not involve all of the |
| |
persons carrying on that activity before the change |
| |
permanently ceasing to carry it on, or |
| 40 |
(ii) | the qualifying activity carried on by the person |
| |
making the disposal was treated as continuing under |
| |
section 114(1) of ICTA (effect of partnership changes |
| |
| |
|
| |
|
| |
|
| |
536 (1) | Amend section 108 (effect of disposal to connected person on overseas |
| |
leasing pool) as follows. |
| |
(2) | In subsection (1) for paragraph (b) and the word “and” at the end of that |
| |
| 5 |
“(b) | the disposal is one on the occasion of which— |
| |
(i) | there was a change in the persons carrying on the |
| |
qualifying activity which involved all of the persons |
| |
carrying on that activity before the change |
| |
permanently ceasing to carry it on, or |
| 10 |
(ii) | the qualifying activity carried on by the person |
| |
making the disposal was not treated as continuing |
| |
under section 114(1) or 343(2) of ICTA (effect of |
| |
partnership changes involving companies or of |
| |
company reconstructions), and”. |
| 15 |
| |
537 (1) | Amend section 112 (excess allowances: connected persons) as follows. |
| |
(2) | In subsection (1) for paragraph (b) and the word “and” at the end of that |
| |
| |
“(b) | the transaction (or each of the transactions) is one— |
| 20 |
(i) | which involved all of the persons carrying on the |
| |
qualifying activity before the transaction |
| |
permanently ceasing to carry it on, or |
| |
(ii) | in respect of which the qualifying activity carried on |
| |
by the person making the disposal was not treated as |
| 25 |
continuing under section 114(1) or 343(2) of ICTA |
| |
(effect of partnership changes involving companies or |
| |
of company reconstructions), and”. |
| |
| |
538 (1) | Amend section 115 (prohibited allowances: connected persons) as follows. |
| 30 |
(2) | In subsection (1) for paragraph (c) and the word “and” at the end of that |
| |
| |
“(c) | the transaction (or each of the transactions) is one— |
| |
(i) | which involved all of the persons carrying on the |
| |
qualifying activity before the transaction |
| 35 |
permanently ceasing to carry it on, or |
| |
(ii) | in respect of which the qualifying activity carried on |
| |
by the person making the disposal was not treated as |
| |
continuing under section 114(1) or 343(2) of ICTA |
| |
(effect of partnership changes involving companies or |
| 40 |
of company reconstructions), and”. |
| |
| |
539 (1) | Amend section 122 (short-term leasing by buyer, lessee etc) as follows. |
| |
|
| |
|
| |
|
(2) | In subsection (2) for paragraph (c) substitute— |
| |
“(c) | a person who acquired the plant or machinery from X as a |
| |
result of a disposal on the occasion of which, or two or more |
| |
disposals on the occasion of each of which— |
| |
(i) | there was a change in the persons carrying on the |
| 5 |
qualifying activity which did not involve all of the |
| |
persons carrying on that activity before the change |
| |
permanently ceasing to carry it on, or |
| |
(ii) | the qualifying activity carried on by the person |
| |
making the disposal was treated as continuing under |
| 10 |
section 114(1) of ICTA (effect of partnership changes |
| |
| |
| |
540 (1) | Amend section 125 (other qualifying purposes) as follows. |
| |
(2) | In subsection (3) for paragraph (c) substitute— |
| 15 |
“(c) | a person who acquired the plant or machinery from X as a |
| |
result of a disposal on the occasion of which, or two or more |
| |
disposals on the occasion of each of which— |
| |
(i) | there was a change in the persons carrying on the |
| |
qualifying activity which did not involve all of the |
| 20 |
persons carrying on that activity before the change |
| |
permanently ceasing to carry it on, or |
| |
(ii) | the qualifying activity carried on by the person |
| |
making the disposal was treated as continuing under |
| |
section 114(1) of ICTA (effect of partnership changes |
| 25 |
| |
| |
541 | In section 154(3) (further registration requirement) for paragraph (b) |
| |
| |
“(b) | the only changes in the persons carrying it on between the |
| 30 |
time that B does so and the time that A or a person connected |
| |
with A does so are changes— |
| |
(i) | which do not involve all of the persons carrying it on |
| |
before the changes permanently ceasing to carry it on, |
| |
| 35 |
(ii) | in respect of which the qualifying activity is treated as |
| |
continuing under section 343(2) of ICTA.” |
| |
542 | In section 155(1) (changes in the persons carrying on qualifying activity) for |
| |
paragraph (b) substitute— |
| |
“(b) | the only changes in the persons carrying on the qualifying |
| 40 |
activity since the shipowner carried it on are changes— |
| |
(i) | which do not involve all of the persons carrying it on |
| |
before the changes permanently ceasing to carry it on, |
| |
| |
(ii) | in respect of which the qualifying activity is treated as |
| 45 |
continuing under section 343(2) of ICTA.” |
| |
|
| |
|
| |
|
543 | In section 156 (connected persons) for subsection (2) substitute— |
| |
“(2) | The condition is that the only changes in the persons carrying on the |
| |
qualifying activity since A carried it on are changes— |
| |
(a) | which do not involve all of the persons carrying it on before |
| |
the changes permanently ceasing to carry it on, or |
| 5 |
(b) | in respect of which the qualifying activity is treated as |
| |
continuing under section 343(2) of ICTA.” |
| |
544 | In section 162(2) (ring fence trade a separate qualifying activity)— |
| |
(a) | in paragraph (a), after “fall within” insert “the definition of “oil- |
| |
related activities” in section 16(2) of ITTOIA 2005 or within”, and |
| 10 |
(b) | in paragraph (b), after “as a result of” insert “section 16(1) of ITTOIA |
| |
| |
545 | In section 248 (ordinary Schedule A businesses)— |
| |
(a) | for “Schedule A” substitute “property”, and |
| |
(b) | in the side-note for “Schedule A” substitute “property”. |
| 15 |
546 | In section 252 (mines, transport undertakings etc)— |
| |
(a) | after “is a concern listed in” insert “section 12(4) of ITTOIA 2005 or”, |
| |
| |
(b) | after “the profits of the concern under” insert “Chapter 2 of Part 2 of |
| |
ITTOIA 2005 or, as the case may be, under”. |
| 20 |
547 | In section 258(4) (special leasing: income tax) for “taxed under Case VI of |
| |
Schedule D” substitute “assessed to income tax”. |
| |
548 (1) | Amend section 263 (qualifying activities carried on in partnership) as |
| |
| |
(2) | In subsection (1) for paragraph (c) substitute— |
| 25 |
“(c) | the following condition is met.” |
| |
(3) | After that subsection insert— |
| |
“(1A) | The condition is that— |
| |
(a) | the change does not involve all of the partners permanently |
| |
ceasing to carry on the qualifying activity, or |
| 30 |
(b) | the change does not result in the qualifying activity being |
| |
treated under section 18 or 362 of ITTOIA 2005 as |
| |
permanently ceasing to be carried on by a company or treated |
| |
as discontinued under section 337(1) of ICTA (companies |
| |
beginning or ceasing to carry on trade etc.).” |
| 35 |
549 (1) | Amend section 265 (successions: general) as follows. |
| |
(2) | In subsection (1) for paragraph (b) substitute— |
| |
“(b) | the following condition is met.” |
| |
(3) | After that subsection insert— |
| |
“(1A) | The condition is that— |
| 40 |
(a) | all of the persons carrying on the qualifying activity before |
| |
the succession permanently cease to carry it on, or |
| |
(b) | the qualifying activity is treated under section 18 or 362 of |
| |
ITTOIA 2005 as permanently ceasing to be carried on by a |
| |
|
| |
|
| |
|
company or treated as discontinued under section 337(1) of |
| |
ICTA (companies beginning or ceasing to carry on trade |
| |
| |
550 | In 268(1) (successions by beneficiaries) for paragraph (b) and the word “and” |
| |
at the end of that paragraph substitute— |
| 5 |
“(b) | all of the persons carrying on the qualifying activity before |
| |
the succession permanently cease to carry it on, and”. |
| |
551 | In section 282 (buildings outside the United Kingdom) for “applicable to |
| |
Case I of Schedule D” substitute “that apply in calculating trade profits for |
| |
income tax purposes or that apply to Case I of Schedule D for corporation |
| 10 |
| |
552 | In section 326(1) (interpretation of section 325) in the definition of |
| |
| |
(a) | after “corresponds to” insert “— |
| |
| 15 |
| |
(b) | an amount brought into account as a receipt in |
| |
calculating the profits of a UK property business |
| |
under sections 277 to 281 of ITTOIA 2005 that is |
| |
calculated by reference to the sum;”. |
| 20 |
553 | In section 331(1)(b) (capital value provisions: interpretation)— |
| |
(a) | after “corresponds to” insert “— |
| |
| |
| |
(ii) | an amount brought into account as a receipt in |
| 25 |
calculating the profits of a UK property |
| |
business under sections 277 to 281 of ITTOIA |
| |
2005 that is calculated by reference to the |
| |
| |
554 (1) | Amend section 353 (lessors and licensors) as follows. |
| 30 |
(2) | In subsection (2) for “a Schedule A business” substitute “a UK property |
| |
business, or a Schedule A business,”. |
| |
(3) | After subsection (3) insert— |
| |
“(3A) | If the person is within the charge to income tax in respect of the |
| |
allowance or charge and his interest in the building is not an asset of |
| 35 |
any property business carried on by him at any time in the relevant |
| |
period, the allowance or charge is to be given effect by treating him |
| |
as if he had been carrying on a UK property business in that period |
| |
| |
(a) | the allowance were an expense of that business, and |
| 40 |
(b) | the charge were a receipt of that business.” |
| |
| |
(a) | for “the person’s” substitute “the person is a company within the |
| |
charge to corporation tax in respect of the allowance or charge and |
| |
| 45 |
(b) | for “him”, in the first place where it occurs, substitute “it”, |
| |
|
| |
|