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Corporation Tax Bill


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

645

 

(b)   

for “provisions applicable to Case I of Schedule D” substitute “life

assurance trade profits provisions”.

219   (1)  

Amend section 761 (charge to income tax or corporation tax of offshore

income gain) as follows.

      (2)  

In subsection (1)(b)(ii) for “as a profit or gain under Case VI of Schedule D”

5

substitute “, under the charge to corporation tax on income,”.

      (3)  

In subsection (2) for “section 11(2A)(c)” substitute “section 19(3)(c) of CTA

2009”.

220   (1)  

Amend section 768B (change in ownership of company with investment

business: deductions generally) as follows.

10

      (2)  

In subsection (6) for “section 75” substitute “Chapter 2 of Part 16 of CTA 2009

(companies with investment business) as”.

      (3)  

In subsection (7) for “sections 338 and 75” substitute “section 338 above

(charges on income deducted from total profits) and Chapter 2 of Part 16 of

CTA 2009”.

15

      (4)  

In subsection (8) for “section 75(7)” substitute “section 1233 of CTA 2009

(companies with investment business: excess capital allowances)”.

      (5)  

In subsection (9) for “section 75” substitute “section 1219 of CTA 2009

(expenses of management of a company’s investment business)”.

      (6)  

In subsection (10)—

20

(a)   

omit “and non-trading deficits”,

(b)   

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

of CTA 2009”,

(c)   

for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”

substitute “section 574 of that Act”, and

25

(d)   

at the end insert “and the non-trading deficits in respect of those

relationships that may be carried forward”.

      (7)  

In subsection (13)—

(a)   

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

of CTA 2009”, and

30

(b)   

for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”

substitute “section 574 of that Act”.

      (8)  

In subsection (14) for “same meaning as in Part IV” substitute “meaning

given by section 1218 of CTA 2009”.

221   (1)  

Amend section 768C (deductions: asset transferred within group) as follows.

35

      (2)  

In subsection (7) for “section 75” substitute “section 1219 of CTA 2009

(expenses of management of a company’s investment business)”.

      (3)  

In subsection (9)—

(a)   

omit “and non-trading deficits”,

(b)   

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

40

of CTA 2009”,

(c)   

for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”

substitute “section 574 of that Act”, and

 
 

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

646

 

(d)   

at the end insert “and the non-trading deficits in respect of those

relationships that may be carried forward”.

      (4)  

In subsection (12) for “same meaning as in Part 4” substitute “meaning given

by section 1218 of CTA 2009”.

      (5)  

In subsection (13)—

5

(a)   

for “Schedule 29 to the Finance Act 2002” substitute “Part 8 of CTA

2009”,

(b)   

in paragraph (a) for “paragraph 55 of that Schedule” substitute

“section 775 of CTA 2009”,

(c)   

in paragraph (b) for “that Act”, “that Schedule”, in the first place

10

where it occurs, and “a credit within paragraph 34(1)(a) of that

Schedule (non-trading credits)” substitute “the 1992 Act”, “that Part”

and “a non-trading credit for the purposes of that Part (see section

746 of that Act)” respectively,

(d)   

in paragraph (c) for “that Schedule” substitute “that Part (see section

15

734(1) of that Act)”, and

(e)   

in paragraph (d) for “Part 6 of that Schedule” substitute “Chapter 6

of that Part”.

222   (1)  

Amend section 768D (change in ownership of company carrying on

property business) as follows.

20

      (2)  

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

business”.

      (3)  

In subsection (2) for “Schedule A loss” substitute “UK property business

loss”.

      (4)  

In subsection (8)—

25

(a)   

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

business”, and

(b)   

in paragraph (b) for “same meaning as in Part 4” substitute “meaning

given by section 1218 of CTA 2009”.

      (5)  

In subsection (9) for “Schedule A business” substitute “UK property

30

business”.

223   (1)  

Amend section 768E (change in ownership of company with unused non-

trading loss on intangible fixed assets) as follows.

      (2)  

In subsections (1) and (4) for “paragraph 35 of Schedule 29 to the Finance Act

2002” substitute “section 753 of CTA 2009 (treatment of non-trading losses)”.

35

      (3)  

In subsection (5) for “paragraph 35(3) of Schedule 29 to the Finance Act 2002”

substitute “section 753(3) of CTA 2009 (carry forward of non-trading

losses)”.

      (4)  

In subsection (7) for “same meaning as in Part 4” substitute “meaning given

by section 1218 of CTA 2009”.

40

224        

In section 774(1) (transactions between dealing company and associated

company) for “Case VI of Schedule D” substitute “the charge to corporation

tax on income”.

225        

In section 774B(5) (disregard of intended effects of arrangement involving

disposal of assets)—

45

 
 

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

647

 

(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 “that Chapter” substitute “that Part”.

226   (1)  

Amend section 774D (disregard of intended effects of arrangement

involving change in relation to a partnership) as follows.

5

      (2)  

In subsection (4) for “section 114 above” substitute “sections 1259 to 1265 of

CTA 2009”.

      (3)  

In subsections (7)(a) and (10)(a), for “paragraph 19 of Schedule 9 to the

Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act)”

substitute “Chapter 9 of Part 5 of CTA 2009 (partnerships involving

10

companies) (and the other provisions of that Part)”.

227        

In section 774E (sections 774B and 774D: exceptions)—

(a)   

in the first sentence of subsection (3), in paragraph (a) for “Chapter 2

of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(b)   

in the second sentence of subsection (3) for “section 100” to “money)”

15

substitute “Chapter 2 of Part 6 of CTA 2009 (relevant non-lending

relationships)”,

(c)   

in subsection (4)(b) after “securities)” insert “or Chapter 10 of Part 6

of CTA 2009 (repos)”, and

(d)   

in subsection (4)(c) after “2005” insert “or Chapter 6 of Part 6 of CTA

20

2009”.

228        

In section 774G(7) (sections 774A to 774D: minor definitions etc) for “section

34 above” substitute “sections 217 to 221 of CTA 2009”.

229   (1)  

Amend section 775A (transfers of rights to receive annual payments) as

follows.

25

      (2)  

In subsection (1), for “(4)” substitute “(2)”.

      (3)  

For subsections (2) to (4) substitute—

“(2)   

This section applies to any annual payment other than—

(a)   

an annual payment under a life annuity;

(b)   

an annual payment under a pension annuity;

30

(c)   

an annual payment to which section 347A applies (certain

annual payments not to form part of the income of a company

for corporation tax purposes);

(d)   

an annual payment in respect of which, by virtue of section

727 of ITTOIA 2005 (payments by individuals arising in UK),

35

no liability to income tax arises under Part 5 of that Act.

(3)   

Where this section applies, the person who sells or transfers the right

to the annual payment shall be charged to tax for the chargeable

period in which the sale or transfer takes place on an amount equal

to the market value of the right to receive the annual payment.

40

(4)   

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

subsection (3) has effect as an application of the charge to

corporation tax on income.”

230   (1)  

Amend section 776 (transactions in land: taxation of capital gains) as follows.

 
 

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

648

 

      (2)  

For subsections (3) and (3A) substitute—

“(3)   

Where this section applies, then, subject to the following provisions

of this section, the company by which any such gain is realised shall

be chargeable to corporation tax, for the accounting period in which

the gain is realised, on the whole of the gain.

5

(3A)   

The charge under subsection (3) has effect as an application of the

charge to corporation tax on income.”

      (3)  

In subsection (6)—

(a)   

in paragraph (a) for “Case I of Schedule D” substitute “Part 3 of CTA

2009”, and

10

(b)   

in paragraph (b) for “subsections (2) and (3) of section 99 above”

substitute “section 136 of CTA 2009”.

      (4)  

In subsection (7) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”.

      (5)  

In subsection (8) for “(3)(b)” substitute “(3)”.

231   (1)  

Amend section 779 (sale and lease-back: limitation on tax reliefs) as follows.

15

      (2)  

For subsection (10) substitute—

“(10)   

In this section references to rent under a lease include references to

expenses which the tenant under the lease is treated as incurring in

respect of the land subject to the lease under—

(a)   

sections 61 to 67 or 292 to 297 of ITTOIA 2005, or

20

(b)   

sections 63 to 67 or 232 to 234 of CTA 2009,

   

and such expenses are treated for the purposes of this section as

having been paid as soon as they have been incurred.”

      (3)  

In subsection (13)—

(a)   

omit paragraph (a),

25

(b)   

in paragraph (c) for “profits or gains chargeable under Case VI of

Schedule D” substitute “profits or gains chargeable to corporation

tax under or by virtue of any provision to which section 834A

(miscellaneous charges) applies”,

(c)   

in paragraph (d) leave out “75 or”, and

30

(d)   

after paragraph (d) insert—

“(da)   

a deduction under section 1219 of CTA 2009

(expenses of management of a company’s investment

business);”.

232        

In section 780(3A) (sale and lease-back: taxation of consideration received)

35

for “as a profit or gain under Case VI of Schedule D” substitute “under the

charge to corporation tax on income”.

233   (1)  

Amend section 781 (assets leased to traders and others) as follows.

      (2)  

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

      (3)  

After subsection (1A) insert—

40

“(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.”

 
 

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

649

 

      (4)  

In subsection (4)—

(a)   

in paragraph (b) for “profits or gains chargeable under Case VI of

Schedule D” substitute “profits or gains chargeable to corporation

tax under or by virtue of any provision to which section 834A

(miscellaneous charges) applies”,

5

(b)   

in paragraph (c) leave out “75 or”, and

(c)   

after paragraph (c) insert—

“(ca)   

a deduction under section 1219 of CTA 2009

(expenses of management of a company’s investment

business);”.

10

234        

In section 782(9) (leased assets: special cases) omit the words from “, and

where” to the end.

235        

In section 785 (definitions for purposes of sections 781 to 784), in the

definition of “capital sum” for “under Case VI of Schedule D” substitute

“under or by virtue of any provision to which section 834A (miscellaneous

15

charges) applies”.

236        

In section 785ZA(3) (restrictions on use of losses: leasing partnerships) for

“section 114(2)” substitute “sections 1262 to 1264 of CTA 2009”.

237        

In section 785ZB(8) (section 785ZA: definitions)—

(a)   

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

20

business losses)”, and

(b)   

in paragraph (d) for “(Case VI losses)” substitute “(losses from

miscellaneous transactions)”.

238        

In section 785C(4)(a) (section 785B: interpretation) for “under Schedule A”

substitute “under Chapter 3 of Part 4 of CTA 2009 as profits of a UK property

25

business”.

239        

In section 785D(3) (section 785B: lease of plant and machinery and other

property) for “under Schedule A” substitute “under Chapter 3 of Part 4 of

CTA 2009 as profits of a UK property business”.

240   (1)  

Amend section 786 (transactions associated with loans or credit) as follows.

30

      (2)  

In subsection (3A)(b) for “chargeable to corporation tax under Case III of

Schedule D” substitute “which is from a source in the United Kingdom and

chargeable to corporation tax under Chapter 5 of Part 10 of CTA 2009

(distributions from unauthorised unit trusts) or Chapter 7 of that Part

(annual payments not otherwise charged).”

35

      (3)  

In subsection (5)(b) for “Case VI of Schedule D” substitute “the charge to

corporation tax on income”.

241   (1)  

Amend section 787 (restriction of relief for payments of interest) as follows.

      (2)  

In subsection (1) for “Tax Acts” substitute “Income Tax Acts”.

      (3)  

Omit subsection (1A).

40

      (4)  

In subsection (2) omit “or total profits”.

      (5)  

Omit subsection (3).

242        

In section 788(7) (relief by agreement with other territories) omit the words

from “, and, in” to the end.

 
 

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

650

 

243        

In section 790(11) (unilateral relief) omit the words from “, and, in” to the

end.

244        

In section 795(4) (computation of income subject to foreign tax)—

(a)   

in paragraph (a) for “section 80(5) of the Finance Act 1996” and

“Chapter II of Part 4” substitute “section 464(1) of CTA 2009” and

5

“Part 5” respectively, and

(b)   

in paragraph (b) for “paragraph 1(3) of Schedule 29 to the Finance

Act 2002” and “that Schedule” substitute “section 906(1) of CTA

2009” and “Part 8 of that Act” respectively.

245   (1)  

Amend section 797 (limits on credit: corporation tax) as follows.

10

      (2)  

In subsection (2A) for the words from “section 11AA” to “under that section”

substitute “Chapter 4 of Part 2 of CTA 2009 (profits attributable to

permanent establishment), and of any regulations made under section 24 of

that Act”.

      (3)  

In subsection (3A) for the words from “to which” to “relates,” substitute—

15

“(a)   

which falls to be set off under section 388(1) of CTA 2009

(insurance companies: basic rule: deficit set off against

income and gains of deficit period), or

(b)   

to which a claim under section 459(1)(a) of that Act (claim to

set off deficit against profits of deficit period) relates,”.

20

      (4)  

In subsection (3B)(b) for “subsection (3A) of section 83 of the Finance Act

1996” substitute “section 457(1) of CTA 2009”.

      (5)  

In subsection (6) for “paragraph 4 of Schedule 8 to the Finance Act 1996”

substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.

246   (1)  

Amend section 797A (foreign tax on items giving rise to a non-trading credit:

25

loan relationships) as follows.

      (2)  

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

substitute “Part 5 of CTA 2009”.

      (3)  

In subsection (2)—

(a)   

for “paragraph (a) of Case III of Schedule D” substitute “section 299

30

of CTA 2009”, and

(b)   

omit “and gains”.

      (4)  

In subsection (4) for “Chapter II of Part IV of the Finance Act 1996” substitute

“Part 5 of CTA 2009”.

      (5)  

In subsection (5)—

35

(a)   

in paragraph (a) for “subsection (2)(c)” to “that Act” substitute

“section 389(1) or 459(1)(b) of CTA 2009”, and

(b)   

in paragraph (b) for “subsection (3A)” to “that Schedule” substitute

“section 391 or 457(1) of CTA 2009”.

      (6)  

In subsection (6) for “section 83(3A) of that Act” substitute “section 457(1) of

40

CTA 2009”.

      (7)  

In subsection (7)(c) for the words from “in pursuance” to the end of sub-

 
 

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

651

 

paragraph (ii) substitute “as the result of—

(i)   

the application of section 388(1) of CTA 2009

(insurance companies: basic rule: deficit set off

against income and gains of deficit period), or

(ii)   

a claim under section 459(1)(a) of that Act (claim to set

5

off deficit against profits of deficit period),”.

      (8)  

In subsection (8) for “paragraph 4 of Schedule 8 to the Finance Act 1996”

substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.

247        

In section 797B (foreign items giving rise to a non-trading credit: intangible

fixed assets)—

10

(a)   

in subsection (1)(a) for “Schedule 29 to the Finance Act 2002”

substitute “Part 8 of CTA 2009”,

(b)   

in subsection (2) for “Case VI of Schedule D” substitute “that Part of

that Act”, and

(c)   

in subsection (4) for “Schedule 29 to the Finance Act 2002” and

15

“paragraph 35(3) of that Schedule” substitute “Part 8 of CTA 2009”

and “section 753(3) of that Act” respectively.

248   (1)  

Amend section 798A (section 797: trade income) as follows.

      (2)  

In subsection (4) for paragraphs (a) to (d) substitute—

“(a)   

income chargeable to tax under Chapter 2 or 15 of Part 3 of

20

CTA 2009 (trade profits and post-cessation receipts),

(b)   

income chargeable to tax under Chapter 3 or 9 of Part 4 of

CTA 2009 (profits of property businesses and post-cessation

receipts),

(c)   

income which arises from a source outside the United

25

Kingdom and is chargeable to tax under section 979 of CTA

2009 (charge to tax on income not otherwise charged), and

(d)   

any other income or profits which by a provision of this Act

is or are—

(i)   

chargeable to tax under Chapter 2 of Part 3 of CTA

30

2009, or

(ii)   

calculated in the same way as the profits of a trade;”.

      (3)  

After subsection (4) insert—

“(5)   

In subsection (4) the references—

(a)   

to income chargeable under Chapter 15 of Part 3 of CTA 2009,

35

and

(b)   

to income chargeable under Chapter 9 of Part 4 of CTA 2009,

   

do not include income that would, but for the repeal by CTA 2009 of

section 103 above, have been chargeable to corporation tax under

that section.”

40

249        

In section 804A(1) (life assurance companies with overseas branches etc:

restriction of credit)—

(a)   

for “Case I or VI of Schedule D” substitute “section 35 of CTA 2009

(charge on trade profits) or section 436A”, and

(b)   

for “to Case I of Schedule D” substitute “for the purposes of section

45

35 of CTA 2009”.

 
 

 
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