Corporation Tax Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
694

(iii)
omit paragraph (bc), and
(iv)
in paragraph (bd) after “credit” insert “under Part 15 of the
Corporation Tax Act 2009”,
(b)
omit sub-paragraph (4), and
(c)
in sub-paragraph (5)—
5
(i)
omit paragraph (ad), and
(ii)
at the end, omit “, (ad)”.
      (7)
In paragraph 83A for “Schedule 20 to the Finance Act 2000” substitute “Part
13 of the Corporation Tax Act 2009”.
      (8)
In paragraph 83F(1)—
10
(a)
in paragraph (a), after “tax credit” insert “under Chapter 2 or 7 of Part
13 of the Corporation Tax Act 2009”, and
(b)
in paragraph (b), after “by it” insert “under that Chapter”.
      (9)
In paragraph 83G—
(a)
in paragraph (a) for “paragraph 14 of Schedule 22 to the Finance Act
15
2001” substitute “section 1151 of the Corporation Tax Act 2009”, and
(b)
in paragraph (b) for “paragraph 24 of that Schedule” substitute
“section 1164 of that Act”.
     (10)
Omit Part 9BA.
     (11)
Omit Part 9C.
20
     (12)
Omit paragraph 84 and the italic cross-heading before it.
Finance Act 1999 (c. 16)
454
The Finance Act 1999 is amended as follows.
455
Omit section 54 (tax treatment of reverse premiums).
456
Omit section 63 (treatment of transfer fees under existing contracts).
25
457   (1)
Amend section 81 (acquisitions disregarded under insurance companies
concession) as follows.
      (2)
In subsection (4)—
(a)
omit paragraph (a), and
(b)
in paragraph (b) for “paragraph 6(4)(a)” substitute “paragraph 6(4)”.
30
      (3)
In subsection (8) for “Chapter II of Part IV of the Finance Act 1996” substitute
“Part 5 of the Corporation Tax Act 2009 (see section 302(5))”.
      (4)
In subsection (9)—
(a)
for “section 473 of the Taxes Act 1988” substitute “section 129 of the
Corporation Tax Act 2009”,
35
(b)
for “the purposes of that Act” substitute “the purpose of calculating
the profits of a company’s trade”, and
(c)
for “paragraph 12(2) of Schedule 9 to the Finance Act 1996” and
“Chapter II of Part IV of that Act of 1996” substitute “section 340(2)
to (4) of the Corporation Tax Act 2009” and “Part 5 of that Act”
40
respectively.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
695

      (5)
In subsection (13) for “Schedule 22 to the Finance Act 2002” substitute
“Chapter 14 of Part 3 of the Corporation Tax Act 2009”.
458
Omit Schedule 6 (tax treatment of receipts by way of reverse premium).
Commonwealth Development Corporation Act 1999 (c. 20)
459
The Commonwealth Development Corporation Act 1999 is amended as
5
follows.
460   (1)
Amend paragraph 6 of Schedule 3 (tax) as follows.
      (2)
In sub-paragraph (2)—
(a)
in paragraph (a) for “section 208 of the Income and Corporation
Taxes Act 1988” substitute “section 1285 of the Corporation Tax Act
10
2009”, and
(b)
in paragraph (b) for “that Act” substitute “the Income and
Corporation Taxes Act 1988”.
      (3)
In sub-paragraph (3) for the words from “as income” to the end substitute
“as dividends of a non-UK resident company chargeable under Chapter 2 of
15
Part 10 of the Corporation Tax Act 2009.”
Finance Act 2000 (c. 17)
461
The Finance Act 2000 is amended as follows.
462   (1)
Amend section 46 (exemption for small trades etc) as follows.
      (2)
For subsection (1)(b) substitute—
20
“(b)
from corporation tax chargeable—
(i)
under Part 3 of the Corporation Tax Act 2009 in
respect of a trade carried on wholly or partly in the
United Kingdom, or
(ii)
under or by virtue of any provision to which section
25
834A of the Taxes Act 1988 (miscellaneous charges)
applies,”.
      (3)
In subsection (2)(b) for “under Case VI of Schedule D” substitute “under or
by virtue of any provision to which section 834A of the Taxes Act 1988
applies”.
30
      (4)
In subsection (2A)—
(a)
for the words from “, 703” to “790” substitute “or 776”, and
(b)
omit paragraph (b).
      (5)
In subsection (6), in the definition of “income”, for paragraph (b)
substitute—
35
“(b)
any profits or gains or other income—
(i)
which is chargeable to corporation tax under
Part 3 of the Corporation Tax Act 2009 in
respect of a trade carried on wholly or partly
in the United Kingdom, or
40
(ii)
which is chargeable to corporation tax under
or by virtue of any provision to which section
834A of the Taxes Act 1988 applies,

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
696


and which (in either case) is not, apart from this
section, exempted from corporation tax chargeable
under or by virtue of that Part or provision.”
463
Omit section 50 (phasing out of relief for payments to trustees of profit
sharing schemes).
5
464
Omit section 69(1) (which introduces Schedule 20).
465
Omit section 143(2) (power to provide incentives to use electronic
communications).
466
In Schedule 12 (provision of services through an intermediary) omit
paragraphs 17 and 18.
10
467
In Schedule 15 (the corporate venturing scheme) in paragraph 60(1) omit
“under Case VI of Schedule D”.
468
Omit Schedule 20 (tax relief for expenditure on research and development).
469   (1)
Amend Schedule 22 (tonnage tax) as follows.
      (2)
In paragraph 50(2)—
15
(a)
in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996”
substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in paragraph (c) for “under Schedule 26 to the Finance Act 2002
(derivative contracts)” substitute “in accordance with Part 7 of the
Corporation Tax Act 2009 (derivative contracts)”.
20
      (3)
For paragraph 51(3) and (4) substitute—
    “(3)
For the purposes of this paragraph “income from investments”
includes anything chargeable to tax under—
(a)
Part 4 of the Corporation Tax Act 2009 (property income),
(b)
section 299 of that Act (loan relationships: non-trading
25
profits),
(c)
Chapter 5 of Part 10 of that Act (distributions from
unauthorised unit trusts), or
(d)
Chapter 7 of that Part (annual payments not otherwise
charged).”
30
      (4)
In paragraph 61(6) for “Chapter II of Part IV of the Finance Act 1996”
substitute “Part 5 of the Corporation Tax Act 2009”.
      (5)
In paragraph 62(6) for “Chapter II of Part IV of the Finance Act 1996”
substitute “Part 5 of the Corporation Tax Act 2009”.
      (6)
In paragraph 63(2)—
35
(a)
in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996”
substitute “Part 5 of the Corporation Tax Act 2009”,
(b)
in paragraph (b) for “under Schedule 26 to the Finance Act 2002
(derivative contracts)” substitute “in accordance with Part 7 of the
Corporation Tax Act 2009 (derivative contracts)”, and
40
(c)
in paragraph (c) for “section 103(1A) of the Finance Act 1996”
substitute “section 475 of the Corporation Tax Act 2009”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
697

Transport Act 2000 (c. 38)
470
The Transport Act 2000 is amended as follows.
471   (1)
Amend Schedule 7 (transfer schemes: tax) as follows.
      (2)
In paragraph 12(5) for “section 100 of the 1988 Act” substitute “section 163 of
the Corporation Tax Act 2009”.
5
      (3)
In paragraph 17—
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
10
Act 2009” and “that Part” respectively.
472   (1)
Amend Schedule 26 (transfers: tax) as follows.
      (2)
In paragraph 7—
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
15
(b)
in sub-paragraph (4) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.
      (3)
For paragraph 13(1) substitute—
    “(1)
Sub-paragraphs (2) to (4) apply if—
20
(a)
the transferor ceased to carry on a trade by virtue of a
relevant transfer taking effect, and
(b)
on the taking effect of that transfer, the transferee began to
carry on the trade.

This sub-paragraph is to be read with sub-paragraph (8).”
25
      (4)
In paragraph 17—
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
30
Act 2009” and “that Part” respectively.
      (5)
In paragraph 29—
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act
35
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.
      (6)
In paragraph 35—
(a)
in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance
Act 1996” substitute “section 444 of the Corporation Tax Act 2009”,
40
and
(b)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
698

Capital Allowances Act 2001 (c. 2)
473
The Capital Allowances Act 2001 is amended as follows.
474
In section 2(4) (general means of giving effect to capital allowances) for
“section 6 of ICTA” substitute “Part 2 of CTA 2009 (see section 2(2) of that
Act)”.
5
475
In section 15(1)(f) (qualifying activities) for “section 55(2) of ICTA” substitute
“section 39(4) of CTA 2009”.
476
In section 16 (ordinary property business) omit “, or a Schedule A business,”.
477   (1)
Amend section 17 (furnished holiday lettings) as follows.
      (2)
In subsection (1) omit “, or a Schedule A business,”.
10
      (3)
In subsection (3), in the second sentence for “has the meaning given by
section 504 of ICTA” substitute “has the same meaning as it has for the
purposes of Chapter 6 of Part 4 of CTA 2009 (see section 265)”.
478   (1)
Amend section 18 (managing investments of a company with investment
business) as follows.
15
      (2)
In subsection (1) for “section 75 of ICTA” substitute “section 1219 of CTA
2009”.
      (3)
In subsection (2) for “section 130 of ICTA” substitute “section 1218 of CTA
2009”.
479
In section 28(2B)(a) (thermal insulation of buildings) for “section 31ZA of
20
ICTA” substitute “section 251 of CTA 2009”.
480
In section 38 (production animals etc) for paragraphs (a) and (b) substitute—
“(a)
animals or other creatures to which section 30 of ITTOIA 2005
or section 50 of CTA 2009 (animals kept for trade purposes)
applies,
25
(b)
animals or other creatures to which Chapter 8 of Part 2 of
ITTOIA 2005 or Chapter 8 of Part 3 of CTA 2009 (herd basis
rules) applies, or
(c)
shares in animals or creatures such as are mentioned in
paragraph (a) or (b).”
30
481   (1)
Amend section 63 (cases in which disposal value is nil) as follows.
      (2)
In subsection (2)(c) for “section 84 of ICTA” substitute “section 106 of CTA
2009”.
      (3)
In subsection (4) for “sections 83A(4) and 84(4) of ICTA” substitute “section
108 of CTA 2009”.
35
482
In section 105(3)(a) (“profits chargeable to tax”) for “section 830(4) of ICTA”
substitute “section 1313(2) of CTA 2009”.
483   (1)
Amend section 106 (the designated period) as follows.
      (2)
In subsection (3)(b) for the words from “each of which” to the end substitute
“each of which there was a change in the persons carrying on the qualifying
40
activity in relation to which Condition A or Condition B was met.”

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
699

      (3)
After subsection (3) insert—
“(3A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
5
(b)
at least one person who carried on the qualifying activity
before the change continued to carry it on after the change.
(3B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
10
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
15
484   (1)
Amend section 108 (effect of disposal to connected person on overseas
leasing pool) as follows.
      (2)
In subsection (1)(b) for the words from “is one” to “reconstructions)”
substitute “does not occur on the occasion of a change in the persons
carrying on the qualifying activity—
20
(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or
(ii)
in relation to which Condition A or Condition B is
met”.
      (3)
After subsection (1) insert—
25
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was within the
charge to income tax in respect of that activity, and
(b)
at least one person who carried on the qualifying activity before the
30
change continued to carry it on after the change.
(1B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company that was within the charge to corporation tax in
35
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
485   (1)
Amend section 112 (excess allowances: connected persons) as follows.
40
      (2)
In subsection (1) for paragraph (b) and the “and” immediately after that
paragraph substitute—
“(b)
the transaction was not effected (or, if more than one, none of
the transactions was effected) on the occasion of a change in
the persons carrying on the qualifying activity—
45
(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
700

(ii)
in relation to which Condition A or Condition B is
met, and”.
      (3)
After subsection (1) insert—
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
5
immediately before or immediately after the change was within the
charge to income tax in respect of that activity, and
(b)
at least one person who carried on the qualifying activity before the
change continued to carry it on after the change.
(1B)
Condition B is that—
10
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
15
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
486   (1)
Amend section 115 (prohibited allowances: connected persons) as follows.
      (2)
In subsection (1) for paragraph (c) and the “and” immediately after that
paragraph substitute—
20
“(c)
the transaction was not effected (or, if more than one, none of
the transactions was effected) on the occasion of a change in
the persons carrying on the qualifying activity—
(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or
25
(ii)
in relation to which Condition A or Condition B is
met, and”.
      (3)
After subsection (1) insert—
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
30
immediately before or immediately after the change was within the
charge to income tax in respect of that activity, and
(b)
at least one person who carried on the qualifying activity before the
change continued to carry it on after the change.
(1B)
Condition B is that—
35
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
40
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
487   (1)
Amend section 122 (short-term leasing by buyer, lessee, etc) as follows.
      (2)
In subsection (2)(c) for the words from “on the occasion of each of which” to
the end substitute “on the occasion of each of which there was a change in
45