Corporation Tax Bill

House of Commons

Session 2008 - 09
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Corporation Tax Bill

614
Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

Schedules
Schedule 1
Section 1322

Minor and consequential amendments
Part 1
Income and Corporation Taxes Act 1988
5
1
The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.
2     (1)
Amend section 6 (the charge to corporation tax and exclusion of income tax
and capital gains tax) as follows.
      (2)
Omit subsections (1) to (3).
      (3)
In subsection (4) omit the words from “, sections” to “248”.
10
      (4)
Omit subsection (4A).
3
Omit section 8 (general scheme of corporation tax).
4     (1)
Amend section 9 (computation of income: application of income tax
principles) as follows.
      (2)
Omit subsections (1) to (4).
15
      (3)
In subsection (5) omit “, by virtue of this section or otherwise,”.
      (4)
Omit subsection (6).
5
In section 11 (companies not resident in United Kingdom) omit subsections
(1) to (2A).
6
Omit section 11AA (determination of profits attributable to permanent
20
establishment).
7
Omit section 12(1) to (7ZA) and (9) (basis of, and periods for, assessment).
8
Omit section 15 (Schedule A).
9
Omit section 18 (Schedule D).
10
Omit section 21A (computation of amount chargeable under Schedule A).
25
11
Omit section 21B (application of other rules applicable to Case I of Schedule
D).
12
Omit section 21C (the Schedule A charge and mutual business).
13    (1)
Amend section 24 (construction of Part 2) as follows.
      (2)
In subsection (1)—
30

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
615

(a)
after the definition of “lease” insert “and”, and
(b)
omit the definitions of “premises” and “premium”.
      (3)
Omit subsections (2) to (4).
      (4)
In subsection (5) omit the definitions of “intermediate landlord”, “premium”
and “reversion”.
5
      (5)
Omit subsection (6)(a).
14
Omit section 30 (expenditure on making sea walls).
15
Omit sections 31ZA to 31ZC (deductions for expenditure on energy-saving
items).
16
Omit sections 34 to 39 (premiums, leases at undervalue etc).
10
17
Omit section 40 (tax treatment of receipts and outgoings on sale of land).
18    (1)
Amend section 42 (appeals against determinations under sections 34 to 36 of
ICTA etc) as follows.
      (2)
Omit subsection (1)(a) and the “or” immediately after it.
      (3)
In the title omit “sections 34 to 36 or”.
15
19
Omit section 46 (savings certificates and tax reserve certificates).
20
Omit section 53 (farming and other commercial occupation of land (except
woodlands)).
21
Omit section 55 (mines, quarries and other concerns).
22    (1)
Amend section 56 (transactions in deposits with and without certificates or
20
in debts) as follows.
      (2)
In subsection (2) for the words from “annual” to the end substitute “an
amount to which the charge to corporation tax on income applies”.
      (3)
In subsection (4B) for “Chapter II of Part IV of the Finance Act 1996” and
“that Chapter” substitute “Part 5 of CTA 2009” and “that Part” respectively.
25
23
Omit section 70 (basis of assessment etc).
24
Omit section 70A (Case V income from land outside UK).
25
Omit section 72 (apportionments etc for purposes of Cases I, II and VI).
26
Omit section 74 (general rules as to deductions not allowable).
27
Omit section 75 (expenses of management: companies with investment
30
business).
28
Omit section 75A (accounting period to which expenses of management are
referable).
29
Omit section 75B (amounts reversing expenses of management deducted:
charge to tax).
35
30    (1)
Amend section 76 (expenses of insurance companies) as follows.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
616

      (2)
In subsection (1) for “section 75 is not to apply” substitute “sections 1219 to
1223 of CTA 2009 (expenses of management of a company’s investment
business) do not apply”.
      (3)
In subsection (2) for the words from “paragraph 4(2)” to the end substitute
“section 388 of CTA 2009 (basic rule: deficit set off against income and gains
5
of deficit period)”.
      (4)
In subsection (4) for “Case I of Schedule D” substitute “section 35 of CTA
2009 (charge on trade profits)”.
      (5)
At Step 2 in subsection (7)—
(a)
in paragraph (a) for “in computing income for the purposes of
10
Schedule A” substitute “in computing, for corporation tax purposes,
the profits of a UK property business”, and
(b)
in paragraph (c) for “section 121(3)” substitute “section 272 of CTA
2009”.
      (6)
At Step 3 in subsection (7)—
15
(a)
omit the entries relating to—
(i)
paragraph 4(4)(b) of Schedule 11 to the Finance Act 1996,
(ii)
paragraph 23 of Schedule 22 to the Finance Act 2001,
(iii)
paragraph 13(2) of Schedule 12 to the Finance Act 2002, and
(iv)
paragraph 36(3) of Schedule 29 to that Act, and
20
(b)
at the end insert—
“section 391(3)(b) of CTA 2009 (carried forward non-
trading deficit on loan relationships);
section 1080(2) of CTA 2009 (30% additional deduction
for qualifying R&D expenditure of company carrying
25
on life assurance business);
section 1161 of CTA 2009 (150% relief for remediation
expenditure on contaminated land owned by
company carrying on life assurance business).”
31
After section 76 insert—
30
“Payments for restrictive undertakings
76ZA
Payments for restrictive undertakings
(1)
This section applies if a payment—
(a)
is treated as earnings of an employee by virtue of section 225
of ITEPA 2003 (payments for restrictive undertakings), and
35
(b)
is made, or treated as made for the purposes of section 226 of
that Act (valuable consideration given for restrictive
undertakings), by a company in relation to which section 76
applies.
(2)
The payment is treated as expenses payable which fall to be brought
40
into account at Step 1 in section 76(7), so far as it otherwise would not
be.”
32
After section 76ZA insert—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
617

“Seconded employees
76ZB
Employees seconded to charities and educational establishments
(1)
This section applies if a company to which section 76 applies makes
the services of a person employed for the purposes of the company’s
life assurance business available to—
5
(a)
a charity, or
(b)
an educational establishment,

on a basis that is stated and intended to be temporary.
(2)
Expenses of the employer that are attributable to the employee’s
employment during the period of the secondment are treated as
10
expenses payable which fall to be brought into account at Step 1 in
section 76(7).
(3)
In this section—
“educational establishment” has the same meaning as in section
70 of CTA 2009, and
15
“the period of the secondment” means the period for which the
employee’s services are made available to the charity or
educational establishment.”
33
After section 76ZB insert—
“Counselling and retraining expenses
20
76ZC
Counselling and other outplacement services
(1)
This section applies if—
(a)
a company carrying on life assurance business (“the
employer”) incurs counselling expenses,
(b)
the expenses are incurred in relation to a person (“the
25
employee”) who holds or has held an office or employment
under the employer, and
(c)
the relevant conditions are met.
(2)
The expenses are brought into account under section 76 as expenses
payable (so far as they otherwise would not be).
30
(3)
In this section “counselling expenses” means expenses incurred—
(a)
in the provision of services to the employee in connection
with the cessation of the office or employment,
(b)
in the payment or reimbursement of fees for such provision,
or
35
(c)
in the payment or reimbursement of travelling expenses in
connection with such provision.
(4)
In this section “the relevant conditions” means—
(a)
conditions A to D for the purposes of section 310 of ITEPA
2003 (employment income exemptions: counselling and
40
other outplacement services), and
(b)
in the case of travel expenses, condition E for those
purposes.”
34
After section 76ZC insert—