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Corporation Tax Bill


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

638

 

(b)   

in paragraphs (a) and (b) for “Case I” substitute “section 35”.

      (3)  

In subsection (2)—

(a)   

for “Case I profits” substitute “section 35 profits”,

(b)   

for “Case I losses” substitute “section 35 losses”, and

(c)   

for “Case I advantage” substitute “life assurance trade profits

5

advantage”.

      (4)  

In subsection (3)—

(a)   

for “a Case I advantage” substitute “a life assurance trade profits

advantage”,

(b)   

for “the Case I advantage” substitute “the advantage”, and

10

(c)   

in paragraphs (a) and (b) for “Case I” substitute “section 35”.

      (5)  

In subsection (5)—

(a)   

for “a Case I advantage” substitute “a life assurance trade profits

advantage”, and

(b)   

for “the Case I advantage” substitute “the advantage”.

15

      (6)  

In subsection (6) for “Case I”, in both places where it occurs, substitute

“section 35”.

      (7)  

In the title for “Case I” substitute “life assurance trade profits”.

149   (1)  

Amend section 444AECC (parts of transfer scheme arrangements: Case I

advantage transferee) as follows.

20

      (2)  

In subsection (1)—

(a)   

for “Case I advantage” substitute “life assurance trade profits

advantage”, and

(b)   

in paragraphs (a) and (b) for “Case I” substitute “section 35”.

      (3)  

In subsection (2)—

25

(a)   

for “Case I profits” substitute “section 35 profits”,

(b)   

for “Case I losses” substitute “section 35 losses”, and

(c)   

for “Case I advantage” substitute “life assurance trade profits

advantage”.

      (4)  

In subsection (3)—

30

(a)   

for “a Case I advantage” substitute “a life assurance trade profits

advantage”,

(b)   

for “the Case I advantage” substitute “the advantage”, and

(c)   

in paragraphs (a) and (b) for “Case I” substitute “section 35”.

      (5)  

In subsection (5) for “Case I”, in both places where it occurs, substitute

35

“section 35”.

      (6)  

In the title for “Case I” substitute “life assurance trade profits”.

150   (1)  

Amend section 444AED (clearance: no avoidance or group advantage) as

follows.

      (2)  

In subsection (2) for “Case I”, in both places where it occurs, substitute “life

40

assurance trade profits”.

      (3)  

In subsection (3) for “Case I”, in both places where it occurs, substitute “life

assurance trade profits”.

 
 

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

639

 

151        

In section 444AF(5) (demutualisation surplus: life assurance business)—

(a)   

in paragraph (a) for “provisions of this Act applicable to Case I of

Schedule D” substitute “life assurance trade profits provisions”, and

(b)   

in paragraph (b) omit “under Case VI of Schedule D”.

152        

In section 444AH (modification of section 444AG etc for Case VI businesses)

5

in the heading for “Case VI” substitute “gross roll-up”.

153        

In section 444AK(3) (mutual surplus: gross roll-up business) for “provisions

of this Act applicable to Case I of Schedule D” substitute “life assurance

trade profits provisions”.

154        

In section 444BA(1) (equalisation reserves for general business) for “Case I

10

or V of Schedule D” substitute “section 35 of CTA 2009 (charge on trade

profits)”.

155        

In section 444BB(2) (modification of section 444BA for mutual or overseas

business and for non-resident companies) for “to Case I of Schedule D”

substitute “for the purposes of section 35 of CTA 2009 (charge on trade

15

profits)”.

156        

Omit section 469(4A) to (5) and (6) (other unit trusts).

157        

Omit section 472A (trading profits etc from securities: taxation of amounts

taken to reserves).

158        

Omit section 473 (conversion etc of securities held as circulating capital).

20

159        

In section 475 (tax-free Treasury securities: exclusion of interest on borrowed

money)—

(a)   

in subsections (1)(b) and (2)(a) for “the Tax Acts” substitute “the

Income Tax Acts”,

(b)   

in subsection (2), omit paragraph (b) and the “and” immediately

25

before it, and

(c)   

in subsection (4) omit the words from “or to be brought” to the end.

160        

In section 477A (building societies: loan relationships), omit subsections

(3)(a) and (aa), (4) and (10).

161        

Omit section 477B (incidental costs of issuing qualifying shares).

30

162   (1)  

Amend section 486 (industrial and provident societies and co-operative

associations) as follows.

      (2)  

In subsection (1), omit from the word “but” to the end.

      (3)  

Omit subsections (4) and (7).

      (4)  

Omit subsections (10) and (11).

35

      (5)  

In subsection (12) omit the definition of “registered industrial and provident

society”.

163        

Omit section 487 (credit unions).

164        

Omit section 491 (distribution of assets of body corporate carrying on

mutual business).

40

165        

In section 492(3A) (treatment of oil extraction activities etc for tax purposes)

for “section 75” substitute “section 1219 of CTA 2009”.

 
 

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

640

 

166   (1)  

Amend section 494 (loan relationships etc) as follows.

      (2)  

In subsection (1) for “Chapter II of Part IV of the Finance Act 1996” substitute

“Part 5 of CTA 2009”.

      (3)  

In subsection (2)—

(a)   

for “Chapter II of Part IV of the Finance Act 1996”, in both places

5

where it occurs, substitute “Part 5 of CTA 2009”,

(b)   

in paragraph (b) for “subsection (4) of section 84” substitute “section

329”, and

(c)   

in paragraph (c) and in the second sentence for “section 100”

substitute “Chapter 2 of Part 6 (relevant non-lending relationships)”.

10

      (4)  

In subsection (2ZA) for “Chapter 2 of Part 4 of the Finance Act 1996”

substitute “Part 5 of CTA 2009”.

      (5)  

In subsection (2A)—

(a)   

in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996”

substitute “Part 5 of CTA 2009”, and

15

(b)   

in the words following paragraph (b) for “section 82(2)” substitute

“section 297”.

167   (1)  

Amend section 494AA (sale and lease-back) as follows.

      (2)  

In subsection (3) for “Schedule D” substitute “Part 3 of CTA 2009”.

      (3)  

In subsection (5)—

20

(a)   

in paragraph (a) for “Schedule D” substitute “Part 3 of CTA 2009”,

and

(b)   

for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5

of CTA 2009”.

168        

In section 494A(1) (computation of amount available for surrender by way

25

of group relief) for “Schedule A losses” substitute “UK property business

losses”.

169   (1)  

Amend section 500 (deduction of PRT in computing income for corporation

tax purposes) as follows.

      (2)  

For subsection (3)(b) substitute—

30

“(b)   

if that chargeable period ends after the accounting period of

the company in or at the end of which the company—

(i)   

ceases to carry on the trade giving rise to the income

referred to above, or

(ii)   

ceases to be within the charge to corporation tax in

35

respect of that trade,

   

that accounting period.”

      (3)  

In subsection (6)(d) for the words from “means” to the end substitute

“means—

(i)   

the accounting period in or at the end of which ends

40

the operative chargeable period, or

(ii)   

if the company ceases to carry on its ring fence trade

(or to be within the charge to corporation tax in

respect of that trade) before the end of the operative

chargeable period, the last accounting period of that

45

trade (or, as the case requires, the accounting period

 
 

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

641

 

during or at the end of which the company ceased to

be within the charge to corporation tax in respect of

that trade).”

170        

In section 501A(5) (supplementary charge in respect of ring fence trades)—

(a)   

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

5

“section 103(1A) and (1B)” substitute “Part 5 of CTA 2009” and

“section 475” respectively,

(b)   

in paragraph (b) for “that Chapter” and “section 103(1A) and (1B)”

substitute “that Part” and “section 475” respectively, and

(c)   

in paragraph (c) for “under Schedule 26 to the Finance Act 2002

10

(derivative contracts)” substitute “in accordance with Part 7 of CTA

2009 (derivative contracts)”.

171        

In section 503(1)(a) (letting of furnished holiday accommodation treated as

a trade for certain corporation tax purposes)—

(a)   

for “Schedule A business” substitute “UK property business”, and

15

(b)   

for “trade the profits of which are chargeable to corporation tax

under Case I of Schedule D,” substitute “trade carried on wholly or

partly in the United Kingdom the profits of which are chargeable to

corporation tax under Part 3 of CTA 2009,”.

172        

Omit section 504 (meaning of “commercial letting of furnished holiday

20

accommodation”).

173   (1)  

Amend section 505 (charitable companies: general) as follows.

      (2)  

In subsection (1)(a) for “under Schedules A and D” substitute “under Parts 3

and 4 of CTA 2009”.

      (3)  

In subsection (1)(aa) for “under Schedules A and D” substitute “under Parts

25

3 and 4 of CTA 2009”.

      (4)  

In subsection (1)(c)—

(a)   

for sub-paragraph (ii) substitute—

“(ii)   

from tax under section 299 of CTA 2009 (non-

trading profits in respect of loan

30

relationships),

(iiza)   

from tax under Chapter 5 of Part 10 of that Act

(distributions from unauthorised unit trusts),

(iizb)   

from tax under Chapter 7 of that Part (annual

payments not otherwise charged),”,

35

(b)   

omit sub-paragraph (iia),

(c)   

for sub-paragraph (iib) substitute—

“(iib)   

from tax under Chapter 2 of Part 10 of CTA

2009 (dividends of non-UK resident

companies) or from tax under Chapter 8 of

40

that Part (income not otherwise charged) so

far as it applies to relevant foreign

distributions,”, and

(d)   

for sub-paragraph (iic) substitute—

“(iic)   

from tax under Part 8 of CTA 2009 in respect

45

of non-trading gains on intangible fixed

assets,”.

 
 

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

642

 

      (5)  

In subsection (1)(e) for “Schedule D” substitute “Part 3 of CTA 2009”.

      (6)  

In subsection (1AA) for the words from “which” to the end substitute “which

is not chargeable under Chapter 2 of Part 10 of CTA 2009.”

      (7)  

In subsection (2) for “Case III of Schedule D” substitute “the charge to

corporation tax on income”.

5

174   (1)  

Amend section 506C (sections 506A and 506B: supplemental) as follows.

      (2)  

In subsection (1) for paragraph (a) substitute—

“(a)   

section 105 of CTA 2009,”.

      (3)  

In subsection (7)(b)(ii) after “2005” insert “or section 501(2) of CTA 2009”.

175        

Omit section 509 (reserves of marketing boards etc).

10

176        

In section 510A(6A) (European Economic Interest Groupings) for “Chapter

2 of Part 4 of the Finance Act 1996” and “section 87A of, and paragraphs 19

and 20 of Schedule 9 to,” substitute “Part 5 of CTA 2009” and “Chapter 9 of

that Part and sections 467 and 472 to 474 of” respectively.

177        

For section 518(2) (harbour reorganisation schemes) substitute—

15

“(2)   

For the purposes of provisions of the Corporation Tax Acts that

apply—

(a)   

only if a person starts to carry on a trade, or

(b)   

only if a person ceases to carry on a trade,

   

the transferor is not treated as ceasing to carry on the trade, and the

20

transferee is not treated as starting to carry it on.”

178        

Omit section 524 (taxation of receipts from sale of patent rights).

179        

Omit section 525 (capital sums: winding up or partnership change).

180        

Omit section 526 (relief for expenses).

181        

Omit section 528 (manner of making allowances and charges).

25

182        

Omit section 531 (provisions supplementary to section 530).

183        

Omit section 532 (application of Capital Allowances Act).

184        

Omit section 533 (interpretation of sections 520 to 532).

185        

Omit section 556 (activity treated as trade etc and attribution of income).

186        

Omit section 558(5) and (6) (visiting performers: supplementary provisions).

30

187        

In section 568(1) (deductions from profits of contributions paid under

certified schemes)—

(a)   

omit “section 74 of this Act or”,

(b)   

after “section 33 of ITTOIA 2005” insert “or section 53 of CTA 2009

(no deduction for capital expenditure)”, and

35

(c)   

for “under Case I of Schedule D or under Part 2 of ITTOIA 2005,”

substitute “under Part 2 of ITTOIA 2005 or Part 3 of CTA 2009,”.

188        

In section 570(4) (payments under certified schemes which are not

repayments of contributions), in the words after paragraph (c), for the words

from “section 337(1)” to the end substitute “section 18 of ITTOIA 2005 or

40

 
 

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

643

 

section 41 of CTA 2009 (company starting or ceasing to be within charge to

corporation tax) is to be treated as effecting a cessation of trading.”

189   (1)  

Amend section 571 (cancellation of certificates) as follows.

      (2)  

In subsection (1) omit the words from “(in” to “Schedule D)”.

      (3)  

After subsection (1A) insert—

5

“(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.”

190        

Omit section 577 (business entertaining expenses).

191        

Omit section 577A (expenditure involving crime).

10

192        

Omit section 578 (housing grants).

193        

Omit sections 578A and 578B (expenditure on car hire).

194        

Omit sections 579 and 580 (statutory redundancy payments).

195        

Omit section 582 (funding bonds issued in respect of interest on certain

debts).

15

196        

Omit section 584 (relief for unremittable overseas income).

197        

Omit sections 586 and 587 (disallowance of deductions for war risk

premiums and of certain payments in respect of war injuries to employees).

198        

In section 587B(2)(b) (gifts of shares, securities and real property to charities

etc) for “section 83A,” substitute “section 105 of CTA 2009 (gifts of trading

20

stock to charities etc),”.

199        

Omit section 588 (training courses for employees).

200        

Omit section 589A (counselling services for employees).

201        

Omit section 589B(5) (interpretation of section 589A).

202        

Omit section 617 (social security benefits and contributions).

25

203        

Omit section 695 (limited interests in residue).

204        

Omit section 696 (absolute interests in residue).

205        

Omit section 697 (supplementary provisions as to absolute interests in

residue).

206        

Omit section 698 (special provisions as to certain interests in residue).

30

207        

Omit section 699A (untaxed sums comprised in the income of the estate).

208        

In section 700 (adjustments and information)—

(a)   

omit subsections (1) to (3),

(b)   

in subsection (4) omit “this Part or”,

(c)   

in subsection (5)—

35

(i)   

omit paragraph (a),

(ii)   

in paragraph (b) omit “(a) or”, and

(iii)   

in the words following paragraph (b) omit the words from

“deemed” to “this Part or”, in the first place where they occur,

 
 

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

644

 

and the words “this Part or” in the second place where they

occur, and for “(a) to” substitute “(aa) and”, and

(d)   

after subsection (6) insert—

“(7)   

This section is to be read as if it were in Chapter 6 of Part 5 of

ITTOIA 2005.”

5

209        

Omit section 701 (interpretation).

210        

Omit section 702 (application to Scotland).

211        

In section 703(3) (cancellation of corporation tax advantage) omit the words

from “(the amount” to “accordingly)”.

212        

In section 709(2) (meaning of “corporation tax advantage” and other

10

expressions), in the definition of “trading stock”, for “the same meaning as

in section 100(1)” substitute “the meaning given by section 163 of CTA 2009”.

213        

In section 730(6) (transfers of rights to receive distributions in respect of

shares)—

(a)   

for the words from “, in respect of” to “Schedule D” substitute “be

15

chargeable, under the charge to corporation tax on income, in respect

of any distribution which is deemed to be his income by virtue of this

section,”, and

(b)   

for “section 18(3B)” substitute “Chapter 6 of Part 10 of CTA 2009 (sale

of foreign dividend coupons)”.

20

214        

In section 736B(2) (deemed manufactured payments in the case of stock

lending arrangements) for “section 97 of the Finance Act 1996” substitute

“Chapter 9 of Part 6 of CTA 2009”.

215        

In section 736C(9) (deemed interest: cash collateral under stock lending

arrangements)—

25

(a)   

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

substitute “Part 5 of CTA 2009”, and

(b)   

in paragraph (b) for “section 100” to “lending of money)” substitute

“Chapter 2 of Part 6 of that Act applies (relevant non-lending

relationships)”.

30

216        

In section 747(1B) (controlled foreign companies: company residence for

purposes of Chapter), for “section 249 of the Finance Act 1994” substitute

“section 18 of CTA 2009”.

217        

In section 751(3) (controlled foreign companies: accounting periods) for

“subsections (3), (5) and (7) of section 12” substitute “sections 10(1) and (5),

35

11(1) and (2) and 12 of CTA 2009”.

218   (1)  

Amend section 755A (treatment of chargeable profits and creditable tax

apportioned to company carrying on life assurance business) as follows.

      (2)  

In subsection (5) for “Case I of Schedule D” substitute “section 35 of CTA

2009 (charge on trade profits)”.

40

      (3)  

In subsection (7) for “Case I of Schedule D” substitute “section 35 of CTA

2009”.

      (4)  

In subsection (11BA)—

(a)   

for “Case I profits”, in both places where it occurs, substitute “section

35 profits”, and

45

 
 

 
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