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Corporation Tax Bill


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

624

 

“Car or motor cycle hire

76ZN    

 Car or motor cycle hire

(1)   

Subsection (2) applies if—

(a)   

in calculating the corporation tax to which a company is

liable for an accounting period, an amount representing

5

expenses incurred on the hiring of a car or motor cycle can be

brought into account under section 76 as expenses payable,

(b)   

the car or motor cycle is not a qualifying hire car or motor

cycle, and

(c)   

the retail price of the car or motor cycle when new exceeds

10

£12,000.

(2)   

The amount that would otherwise be capable of being brought into

account as expenses payable is reduced by multiplying the amount

by the fraction—

   

where RP is the retail price of the car or motor cycle when new.

15

(3)   

Subsection (4) applies if an amount is reduced as a result of

subsection (2), or a corresponding provision, and—

(a)   

subsequently—

(i)   

there is a rebate (however described) of the hire

charges, or

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(ii)   

a debt in respect of any of the hire charges is released

otherwise than as part of a statutory insolvency

agreement, and

(b)   

an amount is brought into account in respect of the rebate or

release.

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(4)   

For the purposes of subsection (3)(b) an amount is brought into

account in respect of a rebate of hire charges or the release of a debt

if—

(a)   

the amount of a reversal representing the rebate or release

falls to be deducted under Step 4 in section 76(7), or

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(b)   

(in the case of a rebate of hire charges) an amount

representing the rebate is chargeable under section 85(1) of

the Finance Act 1989 (c. 26).

(5)   

The amount that would otherwise be deductible as mentioned in

subsection (4)(a) or chargeable as mentioned in subsection (4)(b) is

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reduced by multiplying it by the fraction set out in subsection (2).

(6)   

In this section “corresponding provision” means—

(a)   

section 56(2) of CTA 2009 (car or motor cycle hire: trade

profits and property income),

(b)   

section 1251(2) of CTA 2009 (car or motor cycle hire:

40

companies with investment business), and

(c)   

section 48(2) of ITTOIA 2005 (car or motor cycle hire: trade

profits and property income).

(7)   

The power under section 74(4) of CAA 2001 to increase or further

increase the sums of money specified in Chapter 8 of Part 2 of CAA

45

2001 includes the power to increase or further increase the sum of

money specified in subsection (1)(c) or (2).

 
 

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

625

 

(8)   

In this section “car or motor cycle” and “qualifying hire car or motor

cycle” have the meanings given by section 57 of CTA 2009.”

45         

After section 76ZN insert—

“76ZO   

 Hiring cars (but not motor cycles) with low CO2 emissions before 1

April 2013

5

(1)   

Section 76ZN does not apply to expenses incurred on the hiring of a

car with low CO2 emissions, or an electrically-propelled car, if—

(a)   

the car was first registered on or after 17 April 2002, and

(b)   

the period of hire begins before 1 April 2013 under a contract

entered into before that date.

10

(2)   

For this purpose—

“car with low CO2 emissions” has the meaning given by section

45D of CAA 2001, and

“electrically-propelled car” has the meaning given by that

section.”

15

46         

Omit section 76A (levies and repayments under FISMA 2000).

47         

Omit section 76B (levies and repayments under the FISMA 2000: investment

companies).

48         

Omit section 79 (contributions to local enterprise agencies).

49         

Omit section 79A (contributions to training and enterprise councils and local

20

enterprise companies).

50         

Omit section 79B (contributions to urban regeneration companies).

51         

Omit section 82A (expenditure on research and development).

52         

Omit section 82B (payments to research associations, universities etc).

53         

Omit section 83 (patent fees etc and expenses).

25

54         

Omit section 83A (gifts in kind to charities etc).

55         

Omit section 84 (gifts to educational establishments).

56    (1)  

Amend section 84A (costs of establishing share option or profit sharing

schemes: relief) as follows.

      (2)  

In subsection (2)—

30

(a)   

in paragraph (a) omit “Schedule D or”,

(b)   

omit paragraph (b) and the “or” immediately before it, and

(c)   

omit paragraph (c).

      (3)  

Omit subsection (3ZA)(b).

57         

Omit section 85 (payments to trustees of approved profit sharing schemes).

35

58         

Omit section 85A (costs of establishing employee share ownership trust:

relief).

59         

Omit section 85B (which introduces Schedule 4AA).

60         

Omit section 86 (employees seconded to charities and educational

establishments).

40

 
 

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

626

 

61         

Omit section 86A (charitable donations: contributions to agent’s expenses).

62         

Omit sections 87 and 87A (taxable premiums etc).

63         

Omit section 88 (payments to Export Credits Guarantee Department).

64         

Omit section 88D (restriction of deductions in respect of certain debts).

65         

Omit section 89 (debts proving to be irrecoverable after discontinuance etc).

5

66         

Omit section 90 (additional payments to redundant employees).

67         

Omit section 91 (cemeteries).

68         

Omit section 91A (waste disposal: restoration payments).

69         

Omit sections 91B and 91BA (waste disposal: preparation expenditure).

70         

Omit section 91C (mineral exploration and access).

10

71         

Omit section 92 (regional development grants).

72         

Omit section 93 (other grants under Industrial Development Act 1982 etc).

73         

Omit section 94 (debts deducted and subsequently released).

74         

Omit section 95 (taxation of dealers in respect of distributions etc).

75         

In section 95ZA(1) (taxation of UK distributions received by insurance

15

companies) for “section 208” substitute “section 1285 of CTA 2009”.

76         

Omit section 97 (treatment of farm animals etc).

77         

Omit section 98 (tied premises: receipts and expenses treated as those of

trade).

78         

Omit section 99 (dealers in land).

20

79         

Omit section 100 (valuation of trading stock at discontinuance of trade).

80         

Omit section 101 (valuation of work in progress at discontinuance of

profession or vocation).

81         

Omit section 102 (provisions supplementary to sections 100 and 101).

82         

Omit sections 103 to 106 (Case VI charges on receipts).

25

83         

Omit section 110 (interpretation etc).

84         

Omit section 111(1) (treatment of partnerships).

85         

Omit sections 114 and 115 (special rules for computing profits and losses).

86    (1)  

Amend section 116 (arrangements for transferring relief) as follows.

      (2)  

In subsection (4) for “under Case VI of Schedule D” substitute “under or by

30

virtue of any provision to which section 834A (miscellaneous charges)

applies”.

      (3)  

Omit subsection (5).

87         

Omit section 118ZA (treatment of limited liability partnerships).

88         

Omit section 119 (rent etc payable in connection with mines, quarries and

35

similar concerns).

 
 

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

627

 

89         

Omit section 120 (rent etc payable in respect of electric line wayleaves).

90         

Omit section 121 (management expenses of owner of mineral rights).

91         

Omit section 122 (relief in respect of mineral royalties).

92         

Omit section 125 (annual payments for dividends or non-taxable

consideration).

5

93         

Omit section 128(2) and (3) (commodity and financial futures etc: losses and

gains).

94    (1)  

Amend section 130 (meaning of “company with investment business” and

“investment company” in Part 4) as follows.

      (2)  

Omit ““company with investment business” means any company whose

10

business consists wholly or partly in the making of investments”.

      (3)  

For the title substitute “Meaning of “investment company” in Part 4”.

95         

In section 187(10) (interpretation of sections 185 and 186) for “, within the

meaning of section 486,” substitute “, as defined in section 834(1)”.

96         

Omit section 208 (UK company distributions not generally chargeable to

15

corporation tax).

97    (1)  

Amend section 209 (meaning of distribution) as follows.

      (2)  

In subsection (2)(e) at the beginning insert “subject to subsection (6A),”.

      (3)  

After subsection (6) insert—

“(6A)   

Relevant alternative finance return shall not be treated as a

20

distribution for the purposes of the Corporation Tax Acts by virtue

of subsection (2)(e)(iii).

   

In this subsection “relevant alternative finance return”—

(a)   

for corporation tax purposes means anything that is

alternative finance return for the purposes of Part 6 of CTA

25

2009 as a result of section 513 of that Act or any part of the

redemption payment under arrangements to which section

507 of that Act applies (investment bond arrangements), and

(b)   

for income tax purposes means anything that is alternative

finance return for the purposes of Chapter 5 of Part 2 of the

30

Finance Act 2005 as a result of section 48B(1), 49(2) or 49A(2)

of that Act or any part of the redemption payment under

arrangements to which section 48A of that Act applies

(alternative finance investment bonds).”

98         

In section 212(3) (interest etc paid in respect of certain securities) for “section

35

208” substitute “section 1285 of CTA 2009 (exemption for UK company

distributions)”.

99    (1)  

Amend section 214 (chargeable payments connected with exempt

distributions) as follows.

      (2)  

In subsection (1)(c) for “section 337A(1)” substitute “section 1305(1) of CTA

40

2009 (denial of deduction for distributions)”.

 
 

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

628

 

      (3)  

For subsection (1B) substitute—

“(1B)   

So far as relating to corporation tax, the charge to tax under

subsection (1) has effect as an application of the charge to

corporation tax on income.”

100        

In Chapter 3 of Part 6 (matters which are not distributions for the purposes

5

of the Corporation Tax Acts) after section 230 insert—

“Industrial and provident society dividends etc

230A    

Dividend or bonus granted by industrial and provident society

(1)   

This section applies if—

(a)   

a dividend or bonus is granted by a registered industrial and

10

provident society, and

(b)   

section 132 (deduction for dividends etc granted by

industrial and provident societies) of CTA 2009 allows the

sum representing the dividend or bonus to be deducted in

calculating the profits of a trade.

15

(2)   

The dividend, or the bonus, is not treated as a distribution for the

purposes of the Corporation Tax Acts.”

101        

In section 231AA(3) (no tax credit for borrower under stock lending

arrangement or interim holder under repurchase agreement) for “Schedule

13 to the Finance Act 2007” substitute “Chapter 10 of Part 6 of CTA 2009

20

(repos)”.

102        

In section 231AB(2) (no tax credit for original owner under repurchase

agreement in respect of certain manufactured dividends) for “Schedule 13 to

the Finance Act 2007” substitute “Chapter 10 of Part 6 of CTA 2009 (repos)”.

103        

Omit section 337 (company beginning or ceasing to carry on trade).

25

104   (1)  

Amend section 337A (computation of company’s profits or income:

exclusion of general deductions) as follows.

      (2)  

Omit subsection (1)(a).

      (3)  

In subsection (2)—

(a)   

in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996”

30

substitute “Part 5 of CTA 2009”, and

(b)   

omit paragraph (b) and the “and” immediately before it.

105   (1)  

Amend section 342 (tax on companies in liquidation) as follows.

      (2)  

In subsection (3A) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

      (3)  

In subsection (5) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

35

      (4)  

In subsection (6) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

106   (1)  

Amend section 342A (tax on companies in administration) as follows.

      (2)  

In subsection (7) for “section 12(3)” substitute “section 10(1) of CTA 2009”.

      (3)  

In subsection (8) for “section 12(3)” substitute “section 10(1) of CTA 2009”.

 
 

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

629

 

      (4)  

For subsection (9) substitute—

“(9)   

Section 342(7) applies in relation to this section as it applies in

relation to that section, except that the reference to the completion of

the winding up is to be read as a reference to the relevant event.”

107        

In section 343(2) (company reconstructions without change of ownership)—

5

(a)   

for the words from the beginning to “but—” substitute “In the

circumstances mentioned in subsection (1)—”, and

(b)   

in paragraph (a) for “those Acts” substitute “the Capital Allowances

Act (including enactments which under this Act are to be treated as

contained in that Act)”.

10

108   (1)  

Amend section 392A (Schedule A losses) as follows.

      (2)  

In subsection (1) for “Schedule A loss” substitute “UK property business

loss”.

      (3)  

In subsection (2)—

(a)   

for “Schedule A loss”, in each place where it occurs, substitute “UK

15

property business loss”, and

(b)   

for “Schedule A business” substitute “UK property business”.

      (4)  

In subsection (3)—

(a)   

for paragraph (a) substitute—

“(a)   

ceases to carry on a UK property business, or to be

20

within the charge to corporation tax in respect of such

a business, but”, and

(b)   

in the words after paragraph (b), for “Schedule A loss” substitute

“UK property business loss” and for “section 75” substitute “Chapter

2 of Part 16 of CTA 2009”.

25

      (5)  

In subsection (4)—

(a)   

in paragraph (a) for ““Schedule A loss”” substitute ““UK property

business loss”” and for “Schedule A business” substitute “UK

property business”, and

(b)   

in paragraph (b) for “the same meaning as in Part IV” substitute “the

30

meaning given by section 1218 of CTA 2009”.

      (6)  

In subsection (5) for “Schedule A business” substitute “UK property

business”.

      (7)  

For the title substitute “UK property business losses”.

      (8)  

In the cross-heading immediately before the section for “Schedule A

35

business” substitute “UK property business”.

109        

In section 392B(2) (losses from overseas property business) for “Schedule A

business” substitute “UK property business”.

110        

In section 393(8)(a) (losses other than terminal losses) for “Case I or V of

Schedule D,” substitute “Chapter 2 of Part 3 of CTA 2009,”.

40

111        

In section 393A(3) (losses: set off against profits of the same, or an earlier,

accounting period) for “falling within Case V of Schedule D:” substitute

“carried on wholly outside the United Kingdom:”.

112   (1)  

Amend section 396 (Case VI losses) as follows.

 
 

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

630

 

      (2)  

In subsection (1)—

(a)   

for “under Case VI of Schedule D” substitute “under or by virtue of

a relevant provision”, and

(b)   

for “under that Case” substitute “charged under or by virtue of a

provision to which section 834A (miscellaneous charges) applies”.

5

      (3)  

For subsection (2) substitute—

“(2)   

In this section “relevant provision” means any provision to which

section 834A applies, except section 761(1)(b)(ii) (offshore income

gains).”

      (4)  

After subsection (2) insert—

10

“(2A)   

Subsection (2B) applies to any loss made by a company in a

transaction if—

(a)   

the transaction was of such a nature that, if any profits had

arisen from it, the company would have been liable to

corporation tax in respect of the profits under Case VI of

15

Schedule D for an accounting period ending before 1 April

2009, and

(b)   

the transaction—

(i)   

did not fall within section 34, 35 or 36 (lease

premiums etc), and

20

(ii)   

was not a disposal made after 31 March 2007 to which

Chapter 5 of Part 17 (offshore funds) applied.

(2B)   

So far as relief for the loss has not previously been given, the loss is

to be treated as a loss to be set off against income in accordance with

subsection (1).”

25

      (5)  

For the title substitute “Losses from miscellaneous transactions”.

113   (1)  

Amend section 397 (restriction on relief in case of farming and market

gardening) as follows.

      (2)  

In subsection (7) for the words from “Case I” to “ITTOIA 2005” substitute

“the calculation of the profits of a trade in Part 3 of CTA 2009 (or in Part 2 of

30

ITTOIA 2005)”.

      (3)  

In subsection (8)—

(a)   

in the words before paragraph (a), after “subsection” insert “a trade

shall be treated as discontinued, and a new trade set up in the event

of any of the following—”,

35

(b)   

for paragraph (a) and the “and” immediately after it substitute—

“(a)   

a company starting or ceasing to be within the charge

to corporation tax in respect of a trade;”,

(c)   

in paragraph (b) for the words from the beginning to “the trade”

substitute “a change in the persons carrying on a trade”, and

40

(d)   

after paragraph (b) insert “; or

(c)   

a change in the persons carrying on a trade not falling

within paragraph (b) if—

(i)   

immediately before the change the trade is

carried on by companies in partnership and

45

by no other person, and

 
 

 
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