|
| |
|
1157 | Exclusion for capital gains purposes of certain expenditure |
| |
(1) | This section applies if in an accounting period a payment is made to a company |
| |
in respect of a land remediation tax credit. |
| |
(2) | The qualifying land remediation expenditure in respect of which the payment |
| |
is made is to be treated as if it were excluded by section 39 of TCGA 1992 from |
| 5 |
the sums allowable under section 38 of that Act. |
| |
1158 | Restriction on losses carried forward where tax credit claimed |
| |
(1) | For the purposes of section 392A of ICTA (UK property business losses carried |
| |
forward) a company’s UK property business loss for an accounting period in |
| |
which it claims a land remediation tax credit to which it is entitled is treated as |
| 10 |
reduced by the amount of the surrendered loss for the period. |
| |
(2) | For the purposes of section 393 of ICTA (relief of trading losses against future |
| |
trading profits) a company’s trading loss for an accounting period in which it |
| |
claims a land remediation tax credit to which it is entitled is treated as reduced |
| |
by the amount of the surrendered loss for the period. |
| 15 |
(3) | Subsection (4) applies (instead of subsection (1)) if in an accounting period— |
| |
(a) | as a result of section 432AB(3) of ICTA, a company’s UK property |
| |
business loss is treated for the purposes of section 76 of that Act as |
| |
expenses payable which fall to be brought into account at Step 3 in |
| |
subsection (7) of that section, |
| 20 |
(b) | an amount falls to be carried forward to a subsequent accounting |
| |
period under section 76(12) of ICTA (unrelieved expenses carried |
| |
| |
(c) | the company claims a land remediation tax credit for the period. |
| |
(4) | The amount which falls to be carried forward to a subsequent accounting |
| 25 |
period under section 76(12) of ICTA is treated as reduced by the amount of the |
| |
surrendered loss for the period. |
| |
(5) | References in this section to “the amount of the surrendered loss” for an |
| |
accounting period are to the amount of any qualifying land remediation loss in |
| |
respect of which a land remediation tax credit is claimed for the period. |
| 30 |
| |
Special provision for life assurance business |
| |
| |
1159 | Limitation on relief under Chapter 2 |
| |
(1) | Chapter 2 does not apply to allow an insurance company— |
| 35 |
(a) | any deduction under section 1147, or |
| |
(b) | any additional deduction under section 1149, |
| |
| in calculating in accordance with the provisions mentioned in subsection (2) |
| |
the profits for an accounting period which arise to the company from its life |
| |
assurance business or from its gross roll-up business. |
| 40 |
|
| |
|
| |
|
(2) | The provisions referred to in subsection (1) are those applicable for the |
| |
purposes of section 35 (charge on trade profits). |
| |
| |
1160 | Provision in respect of I minus E basis |
| |
The remaining provisions of this Chapter apply if, for an accounting period, an |
| 5 |
insurance company is charged to tax under the I minus E basis in respect of its |
| |
| |
Relief for qualifying Chapter 4 expenditure |
| |
1161 | Relief in respect of I minus E basis: enhanced expenses payable |
| |
(1) | A company is entitled to relief for an accounting period if conditions A, B and |
| 10 |
| |
(2) | Condition A is that land in the United Kingdom is a management asset of the |
| |
| |
(3) | Condition B is that at the time of acquisition of the land by the company all or |
| |
part of the land is or was in a contaminated state (see section 1145). |
| 15 |
(4) | Condition C is that the company incurs qualifying Chapter 4 expenditure in |
| |
the accounting period in respect of the land (see section 1162). |
| |
(5) | For the company to obtain the relief it must make a claim. |
| |
(6) | The relief is that the company may treat 150% of the qualifying Chapter 4 |
| |
expenditure as expenses payable which fall to be brought into account for the |
| 20 |
accounting period at Step 1 in section 76(7) of ICTA (deduction for expenses |
| |
| |
(7) | For the purposes of this section land is a management asset of a company if it |
| |
| |
(a) | an asset provided for use or used for the management of life assurance |
| 25 |
business carried on by the company, or |
| |
(b) | an asset in respect of which expenditure is being incurred with a view |
| |
to such use by the company. |
| |
1162 | Meaning of “qualifying Chapter 4 expenditure” |
| |
For the purposes of this Chapter a company’s “qualifying Chapter 4 |
| 30 |
expenditure” in an accounting period means— |
| |
(a) | its qualifying land remediation expenditure in the period, less |
| |
(b) | the amount (if any) which as a result of paragraph (a) of Step 1 in |
| |
section 76(7) of ICTA is not to be brought into account at that step as |
| |
expenses payable for the period. |
| 35 |
1163 | No relief if company responsible for contamination |
| |
A company is not entitled to relief under section 1161 in respect of expenditure |
| |
on land all or part of which is in a contaminated state if the land is in that state |
| |
|
| |
|
| |
|
wholly or partly as a result of any thing done, or omitted to be done, at any time |
| |
| |
| |
(b) | a person with a relevant connection to the company (see section 1178). |
| |
Life assurance company tax credits |
| 5 |
1164 | Entitlement to tax credit |
| |
(1) | A company is entitled to a life assurance company tax credit for an accounting |
| |
period if it has a qualifying life assurance business loss in the period (see |
| |
| |
(2) | For the company to obtain a life assurance company tax credit in respect of all |
| 10 |
or part of the qualifying life assurance business loss it must make a claim. |
| |
(3) | The amount of a life assurance company tax credit to which the company is |
| |
entitled is determined in accordance with section 1166. |
| |
(4) | See also section 1168, which restricts the carry forward of expenses payable |
| |
where a company claims a life assurance company tax credit. |
| 15 |
1165 | Meaning of “qualifying life assurance business loss” |
| |
(1) | For the purposes of this Chapter a company has a “qualifying life assurance |
| |
business loss” in an accounting period (“the relevant accounting period”) if in |
| |
| |
(a) | it is entitled to relief under section 1161, and |
| 20 |
(b) | an amount falls to be carried forward to a subsequent accounting |
| |
period under section 76(12) of ICTA (unrelieved expenses carried |
| |
| |
(2) | In determining for the purposes of subsection (1)(b) whether there is an |
| |
amount which falls to be carried forward to a subsequent accounting period |
| 25 |
under section 76(12) of ICTA, no account is to be taken of the amounts specified |
| |
| |
(3) | Those amounts are amounts— |
| |
(a) | brought forward from an earlier accounting period, and |
| |
(b) | treated for the purposes of section 76 of ICTA as expenses payable |
| 30 |
which fall to be brought into account for the relevant accounting period |
| |
| |
(i) | Step 7 in section 76(7) of ICTA, as a result of a previous |
| |
application of section 76(12) or (13) of that Act, or |
| |
(ii) | Step 3 in section 76(7) of ICTA, as a result of section 391 of this |
| 35 |
Act (carry forward of surplus deficit). |
| |
(4) | The amount of the qualifying life assurance business loss is— |
| |
(a) | the amount which falls to be carried forward as mentioned in |
| |
| |
(b) | if less, 150% of the qualifying Chapter 4 expenditure in respect of which |
| 40 |
| |
|
| |
|
| |
|
1166 | Amount of tax credit |
| |
(1) | The amount of the life assurance company tax credit to which a company is |
| |
entitled for an accounting period is 16% of the amount of the qualifying life |
| |
assurance business loss for the period. |
| |
(2) | The Treasury may by order replace the percentage for the time being specified |
| 5 |
in subsection (1) with a different percentage. |
| |
(3) | An order under subsection (2) may contain incidental, supplemental, |
| |
consequential and transitional provision and savings. |
| |
1167 | Payment of tax credit etc |
| |
(1) | The provisions mentioned in subsection (2) have effect in relation to a life |
| 10 |
assurance company tax credit subject to the modifications set out in subsection |
| |
| |
(2) | The provisions referred to in subsection (1) are— |
| |
section 1151(4) (payment of tax credit by officer of Revenue and Customs); |
| |
section 1155 (supplementary provision about payment of tax credit); |
| 15 |
section 1156 (tax credit payment not income of company); |
| |
section 1157 (qualifying expenditure excluded for capital gains purposes). |
| |
(3) | The modifications referred to in subsection (1) are as follows— |
| |
(a) | for any reference to a land remediation tax credit substitute a reference |
| |
to a life assurance company tax credit, and |
| 20 |
(b) | in section 1157(2) for the reference to qualifying land remediation |
| |
expenditure substitute a reference to qualifying Chapter 4 expenditure. |
| |
1168 | Restriction on carrying forward expenses payable where tax credit claimed |
| |
(1) | This section applies if a company claims a life assurance company tax credit to |
| |
which it is entitled for an accounting period. |
| 25 |
(2) | For the purposes of section 76 of ICTA the amount which may be— |
| |
(a) | carried forward from the accounting period under subsection (12) of |
| |
| |
(b) | brought into account in accordance with Step 7 in subsection (7) of that |
| |
| 30 |
| is treated as reduced by the amount of the surrendered loss for the period. |
| |
(3) | The “amount of the surrendered loss” for the period means the amount of the |
| |
qualifying life assurance business loss in respect of which the land remediation |
| |
tax credit is claimed for the period. |
| |
| 35 |
| |
1169 | Artificially inflated claims for relief or tax credit |
| |
(1) | To the extent that a transaction is attributable to arrangements entered into |
| |
wholly or mainly for a disqualifying purpose, it is to be disregarded for the |
| |
purposes mentioned in subsection (2). |
| 40 |
|
| |
|
| |
|
(2) | Those purposes are determining for an accounting period the amount of— |
| |
(a) | any relief to which a company is entitled under Chapter 2, |
| |
(b) | any land remediation tax credits to which a company is entitled under |
| |
| |
(c) | any relief to which a company carrying on life assurance business is |
| 5 |
entitled under section 1161, and |
| |
(d) | any life assurance company tax credits to which such a company is |
| |
entitled under section 1164. |
| |
(3) | Arrangements are entered into wholly or mainly for a “disqualifying purpose” |
| |
if their main object, or one of their main objects, is to enable a company to |
| 10 |
| |
(a) | relief under Chapter 2 to which the company would not otherwise be |
| |
entitled or of a greater amount than that to which it would otherwise be |
| |
| |
(b) | a land remediation tax credit to which it would not otherwise be |
| 15 |
entitled or of a greater amount than that to which it would otherwise be |
| |
| |
(c) | relief under section 1161 to which it would not otherwise be entitled or |
| |
of a greater amount than that to which it would otherwise be entitled, |
| |
| 20 |
(d) | a life assurance company tax credit to which it would not otherwise be |
| |
entitled or of a greater amount than that to which it would otherwise be |
| |
| |
(4) | In this section “arrangements” includes any scheme, agreement or |
| |
understanding, whether or not legally enforceable. |
| 25 |
| |
| |
| |
(1) | For the purposes of this Part the staffing costs of a company are amounts to |
| |
which any of subsections (2) to (5) applies. |
| 30 |
(2) | This subsection applies to an amount paid by the company to a director or an |
| |
employee of the company which— |
| |
(a) | is earnings consisting of money, and |
| |
(b) | is paid because of the director’s or employee’s employment. |
| |
(3) | This subsection applies to an amount paid by the company to a director or an |
| 35 |
employee of the company, other than an amount paid in respect of benefits in |
| |
| |
(a) | the amount is paid in respect of expenses paid by the director or |
| |
| |
(b) | the amount is paid because of the director’s or employee’s |
| 40 |
| |
(4) | This subsection applies to secondary Class 1 national insurance contributions |
| |
| |
|
| |
|
| |
|
(5) | This subsection applies to contributions paid by the company to a pension |
| |
fund operated for the benefit of directors or employees of the company. |
| |
(6) | In subsection (5) “pension fund” means a scheme, fund or other arrangement |
| |
established and maintained (whether in the United Kingdom or elsewhere) for |
| |
the purpose of providing pension benefits. |
| 5 |
| For this purpose “scheme” includes a deed, agreement or series of agreements. |
| |
(7) | In subsection (6) “pension benefits” means pensions, retirement annuities, |
| |
allowances, lump sums, gratuities or other superannuation benefits (with or |
| |
without subsidiary benefits). |
| |
1171 | Staffing costs attributable to relevant land remediation |
| 10 |
(1) | This section applies for the purposes of this Part to identify the staffing costs of |
| |
a company which are attributable to relevant land remediation. |
| |
(2) | The costs which are so attributable are those paid to, or in respect of, directors |
| |
or employees who are directly and actively engaged in relevant land |
| |
| 15 |
(3) | Subsection (4) applies if a director (“D”) or employee (“E”) is partly engaged |
| |
directly and actively in relevant land remediation. |
| |
| |
(a) | if the time D or E spends so engaged is less than 20% of D’s or E’s total |
| |
working time, none of the staffing costs relating to D or E is treated as |
| 20 |
attributable to relevant land remediation, |
| |
(b) | if the time D or E spends so engaged is more than 80% of D’s or E’s total |
| |
working time, the whole of the staffing costs relating to D or E is treated |
| |
as attributable to relevant land remediation, and |
| |
(c) | in any other case, the appropriate proportion of the staffing costs |
| 25 |
relating to D or E is treated as attributable to relevant land remediation. |
| |
(5) | Subsection (6) applies if persons provide services (such as secretarial or |
| |
administrative services) in support of activities carried on by others. |
| |
(6) | Those persons are not, as a result of providing those services, to be treated as |
| |
themselves directly and actively engaged in those activities. |
| 30 |
1172 | Expenditure on materials |
| |
For the purposes of this Part expenditure on materials is attributable to |
| |
relevant land remediation if the materials are employed directly in the relevant |
| |
| |
1173 | Expenditure incurred because of contamination |
| 35 |
(1) | This section applies to identify cases in which the condition in section 1144(3) |
| |
is to be treated as met (expenditure incurred because land in contaminated |
| |
| |
(2) | If the only reason that expenditure on the land is increased is that the land is in |
| |
a contaminated state, the amount by which the expenditure is increased is to |
| 40 |
be treated as expenditure meeting the condition in section 1144(3). |
| |
|
| |
|
| |
|
(3) | Subsection (4) applies if the main purpose of any works done, operations |
| |
carried out or steps taken is— |
| |
(a) | to prevent or minimise, or remedy or mitigate the effects of, any harm, |
| |
or any pollution of controlled waters, by virtue of which the land is in |
| |
| 5 |
(b) | to restore the land or waters to their former state. |
| |
(4) | Expenditure on such works, operations or steps is to be treated as meeting the |
| |
condition in section 1144(3). |
| |
(5) | This section does not affect the width of the provision made by section 1144(3). |
| |
1174 | Sub-contractor payments |
| 10 |
(1) | Sections 1175 and 1176 apply if a company makes a sub-contractor payment. |
| |
(2) | They apply for the purpose of determining the amount of the payment which |
| |
is “qualifying expenditure on sub-contracted land remediation” for the |
| |
purposes of section 1144(5). |
| |
(3) | In this Chapter, a “sub-contractor payment” means a payment made by a |
| 15 |
company to another person (“the sub-contractor”) in respect of relevant land |
| |
remediation contracted out by the company to that person. |
| |
1175 | “Qualifying expenditure on sub-contracted land remediation”: connected |
| |
| |
(1) | This section applies if— |
| 20 |
(a) | a company makes a sub-contractor payment, |
| |
(b) | the company and the sub-contractor are connected, and |
| |
(c) | in accordance with generally accepted accounting practice, the whole |
| |
of the sub-contractor payment and all of the sub-contractor’s relevant |
| |
expenditure have been brought into account in determining the sub- |
| 25 |
contractor’s profit or loss for a relevant period. |
| |
(2) | The amount of the sub-contractor payment which is “qualifying expenditure |
| |
on sub-contracted land remediation” is— |
| |
(a) | the entire payment, or |
| |
(b) | if less, an amount equal to the sub-contractor’s relevant expenditure. |
| 30 |
(3) | “Relevant expenditure” of the sub-contractor means expenditure that— |
| |
(a) | is incurred by the sub-contractor in carrying on, on behalf of the |
| |
company, the activities to which the sub-contractor payment relates, |
| |
(b) | is not of a capital nature, |
| |
(c) | is incurred on staffing costs or materials, and |
| 35 |
| |
(4) | “Relevant period” means a period— |
| |
(a) | for which accounts are drawn up for the sub-contractor, and |
| |
(b) | that ends not more than 12 months after the end of the company’s |
| |
period of account in which the sub-contractor payment is, in |
| 40 |
accordance with generally accepted accounting practice, brought into |
| |
account in determining the company’s profit or loss. |
| |
|
| |
|