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
701

the persons carrying on the qualifying activity in relation to which
Condition A or B was met.”
      (3)
After subsection (2) insert—
“(2A)
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.
(2B)
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.”
488   (1)
Amend section 125 (other qualifying purposes) as follows.
      (2)
In subsection (3)(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
20
the persons carrying on the qualifying activity in relation to which
Condition A or B was met.”
      (3)
After subsection (3) insert—
“(3A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
25
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.
(3B)
Condition B is that—
30
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company which was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
35
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
489
In section 252 (mines, transport undertakings etc) for “section 55(2) of ICTA”
substitute “section 39(4) of CTA 2009”.
490   (1)
Amend section 253 (companies with investment business) as follows.
40
      (2)
In subsection (2) for “section 75(4) of ICTA” substitute “section 1233 of CTA
2009”.
      (3)
In subsection (4) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”.
      (4)
In subsection (6) for “section 75(4) of ICTA” substitute “section 1233 of CTA
2009”.
45

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
702

491   (1)
Amend section 256 (different giving effect rules for different categories of
business) as follows.
      (2)
In subsection (2)(b) for the words from “amount” to the end substitute
“company as receiving for the chargeable period in question an amount
which is equal to the amount of the charges (or parts of charges) and to
5
which the charge to corporation tax on income applies”.
      (3)
In subsection (4) for “under Case VI of Schedule D” substitute “chargeable
under section 436A of ICTA”.
492
In section 257(2)(a) (supplementary) for “Case I” substitute “life assurance
trade”.
10
493
In section 260(8) (special leasing: corporation tax (excess allowance)) for
“section 6 of ICTA (charge to corporation tax etc)” substitute “Part 2 of CTA
2009 (see section 2(2) of that Act)”.
494   (1)
Amend section 263 (qualifying activities carried on in partnership) as
follows.
15
      (2)
For subsection (1)(c) substitute—
“(c)
if the qualifying activity is a trade or property business, the
condition in subsection (1A) or (1B) (whichever is
appropriate) is met.”
      (3)
For subsection (1A) substitute—
20
“(1A)
For income tax purposes, the condition is that a person carrying on the trade
or property business immediately before the change continues to carry it on
after the change.
(1B)
For corporation tax purposes, the condition is that a company
carrying on the trade or property business in partnership
25
immediately before the change continues to carry it on in partnership
after the change.”
495   (1)
Amend section 265 (successions: general) as follows.
      (2)
For subsection (1)(b) substitute—
“(b)
if the qualifying activity is a trade or property business, the
30
condition in subsection (1A) or (1B) (whichever is
appropriate) is met.”
      (3)
For subsection (1A) substitute—
“(1A)
For income tax purposes, the condition is that no person carrying on the
trade or property business immediately before the succession continues to
35
carry it on after the succession.
(1B)
For corporation tax purposes, the condition is that no company
carrying on the trade or property business in partnership
immediately before the succession continues to carry it on in
partnership after the succession.”
40
496
In section 282 (buildings outside the United Kingdom) for the words from
“or that apply” to the end substitute “or corporation tax purposes.”

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
703

497
In section 291(3)(a) (supplementary provisions with respect to elections) for
“section 38(1) to (4) and (6) of ICTA,” substitute “sections 243 and 244 of CTA
2009,”.
498
In section 326(1) (interpretation of section 325), in the definition of
“premium” for paragraph (a) and the “or” immediately after it substitute—
5
“(a)
an amount brought into account as a receipt in calculating the
profits of a property business under sections 217 to 221 of
CTA 2009 that is calculated by reference to the sum, or”.
499
In section 331(1)(b) (meaning of “capital value”) for sub-paragraph (i) and
the “or” immediately after it substitute—
10
“(i)
an amount brought into account as a receipt in
calculating the profits of a property business under
sections 217 to 221 of CTA 2009 that is calculated by
reference to the sum, or”.
500   (1)
Amend section 353 (lessors and licensors) as follows.
15
      (2)
In subsection (2) omit “, or a Schedule A business,”.
      (3)
In subsection (4) for “Schedule A business” substitute “UK property
business”.
501   (1)
Amend section 354 (buildings temporarily out of use) as follows.
      (2)
In subsection (3), in the words after paragraph (b)—
20
(a)
for “section 105 of ICTA” substitute “section 196 of CTA 2009”, and
(b)
for “section 103 or 104(1) of ICTA” substitute “Chapter 15 of Part 3 of
CTA 2009”.
      (3)
In subsection (5) for “section 18 of ITTOIA 2005 or section 337(1) of ICTA”
substitute “section 577(2A) of this Act or section 18 of ITTOIA 2005”.
25
502
In section 390(1) (interpretation of section 389), in the definition of
“premium” for paragraph (a) and the “or” immediately after it substitute—
“(a)
an amount brought into account as a receipt in calculating the
profits of a UK property business under sections 217 to 221 of
CTA 2009 that is calculated by reference to the sum, or”.
30
503   (1)
Amend section 392 (UK property business and Schedule A business) as
follows.
      (2)
In subsection (2) omit “, or a Schedule A business,”.
      (3)
In subsection (2A)—
(a)
omit the words from “is within” to “and he”, and
35
(b)
for “treating him as if he had been carrying on” substitute “treating
the person as having carried on”.
      (4)
Omit subsection (3).
      (5)
For the title substitute “UK property businesses”.
504
In section 393B(4) (meaning of “qualifying expenditure”) omit “or Schedule
40
A business”.
505
In section 393J(3)(a) (entitlement to writing-down allowances) for “section
38(1) to (4) and (6) of ICTA,” substitute “sections 243 and 244 of CTA 2009,”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
704

506   (1)
Amend section 393T (giving effect to allowances and charges) as follows.
      (2)
In subsection (2) omit “, or a Schedule A business,”.
      (3)
In subsection (2A)—
(a)
for the words from “person” to “his” substitute “person’s”,
(b)
for “by him” substitute “by the person”, and
5
(c)
for “treating him as if he had been carrying on” substitute “treating
the person as having carried on”.
      (4)
Omit subsection (3).
507   (1)
Amend section 406 (reduction where premium relief previously allowed) as
follows.
10
      (2)
In subsection (1)(b) for “sections 87 and 87A of ICTA” substitute “sections 62
to 67 of CTA 2009”.
      (3)
In subsection (2) for “sections 87 and 87A of ICTA” substitute “sections 62 to
67 of CTA 2009”.
508
In section 454(1)(c) (qualifying expenditure) for “section 531(3)(a) of ICTA”
15
substitute “section 178 of CTA 2009”.
509
In section 455(4) (excluded expenditure) for “section 531(2) of ICTA”
substitute “section 178(3) of CTA 2009”.
510
In section 462(3) (disposal values) for “section 531(2) of ICTA” substitute
“section 178(2) of CTA 2009”.
20
511
In section 481(5)(b) (anti-avoidance: limit on qualifying expenditure) for
“section 524 of ICTA” substitute “section 912 of CTA 2009”.
512
In section 483(c) (meaning of “income from patents”) for “section 524 or 525
of ICTA” substitute “section 912 or 918 of CTA 2009”.
513
In section 488(3)(a) (balancing allowances) for “section 18 of ITTOIA or
25
section 337(1) of ICTA” substitute “section 577(2A) of this Act or section 18
of ITTOIA 2005”.
514   (1)
Amend section 529 (giving effect to allowances and charges) as follows.
      (2)
In subsection (1) omit “, or a Schedule A business,”.
      (3)
In subsection (1A)—
30
(a)
omit the words from “is within” to “and he”, and
(b)
for “treating him as if he had been carrying on” substitute “treating
the person as having carried on”.
      (4)
Omit subsection (2).
515
In section 536(5)(a)(v) (contributions not made by public bodies and not
35
eligible for tax relief) for “section 55(2) of ICTA” substitute “section 39(5) of
CTA 2009”.
516
In section 545(4) (investment assets) for “Case I of Schedule D” substitute
“section 35 of CTA 2009 (charge on trade profits)”.
517   (1)
Amend section 558 (effect of partnership changes) as follows.
40

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
705

      (2)
For subsection (1)(c) substitute—
“(c)
the condition in subsection (1A) or (1B) (whichever is
appropriate) is met.”
      (3)
After subsection (1) insert—
“(1A)
For income tax purposes, the condition is that a person carrying on
5
the relevant activity immediately before the change continues to
carry it on after the change.
(1B)
For corporation tax purposes, the condition is that a company
carrying on the relevant activity in partnership immediately before
the change continues to carry it on in partnership after the change.”
10
518   (1)
Amend section 559 (effect of successions) as follows.
      (2)
For subsection (1)(b) substitute—
“(b)
the condition in subsection (1A) or (1B) (whichever is
appropriate) is met.”
      (3)
After subsection (1) insert—
15
“(1A)
For income tax purposes, the condition is that no person carrying on the
relevant activity immediately before the succession continues to carry it on
after the succession.
(1B)
For corporation tax purposes, the condition is that no company
carrying on the relevant activity in partnership immediately before
20
the succession continues to carry it on in partnership after the
succession.”
519   (1)
Amend section 577 (other definitions) as follows.
      (2)
In subsection (1), in the definition of “property business” omit “, a Schedule
A business”.
25
      (3)
After subsection (2) insert—
“(2A)
A person’s ceasing to carry on a trade, property business, profession
or vocation is treated for the purposes of this Act as the permanent
discontinuance of the trade, property business, profession or
vocation, whether or not it is in fact discontinued.
30
(2B)
For income tax purposes, a change in the persons carrying on a trade,
property business, profession or vocation is not treated as the permanent
discontinuance of the trade, property business, profession or vocation if a
person carrying it on immediately before the change continues to carry it on
after the change.
35
(2C)
For corporation tax purposes, a change in the persons carrying on a
trade or property business is not treated as the permanent
discontinuance of the trade or property business if a company
carrying it on in partnership immediately before the change
continues to carry it on in partnership after the change.”
40
520   (1)
Amend Schedule A1 (first-year tax credits) as follows.
      (2)
In paragraph 5—
(a)
in sub-paragraph (1) for “Schedule A business” substitute “UK
property business”, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
706

(b)
in sub-paragraph (2) for “(Schedule A losses)” substitute “(UK
property business losses)”.
      (3)
In paragraph 7—
(a)
in sub-paragraph (1)(a) for “Schedule A business” substitute “UK
property business”, and
5
(b)
in sub-paragraph (3) for “Schedule A business” substitute “UK
property business”.
      (4)
In paragraph 8(2) for paragraph (a) substitute—
“(a)
the sum of the amounts mentioned in section 1223(2) of
CTA 2009, exceeds”.
10
      (5)
In paragraph 11(4) for paragraphs (a) to (d) substitute—
“(a)
Chapter 2 or 7 of Part 13 of CTA 2009 (tax credits for
expenditure on research and development or vaccine
research etc),
(b)
Chapter 3 of Part 14 of that Act (tax credits for remediation
15
of contaminated land), and
(c)
Chapter 3 of Part 15 of that Act (film tax credits).”
      (6)
In paragraph 12—
(a)
in sub-paragraph (1) for “Schedule A business” substitute “UK
property business”, and
20
(b)
in sub-paragraph (2)(c) for “Part 3 of Schedule 22 to FA 2001”
substitute “Chapter 3 of Part 14 of CTA 2009”.
      (7)
In paragraph 14—
(a)
in sub-paragraph (1)(a) for “Schedule A business” substitute “UK
property business”,
25
(b)
in sub-paragraph (4)(a) for “Part 3 of Schedule 22 to FA 2001”
substitute “Chapter 3 of Part 14 of CTA 2009”, and
(c)
in sub-paragraph (6)(b) for “paragraph 4(4) of Schedule 11 to FA
1996” substitute “section 391(3)(b) of CTA 2009”.
      (8)
In paragraph 15(3) for “section 75(9) of that Act” substitute “section 1223 of
30
CTA 2009”.
      (9)
In paragraph 16—
(a)
in sub-paragraph (2)(a) for “Part 4 of Schedule 22 to FA 2001”
substitute “Chapter 4 of Part 14 of CTA 2009”, and
(b)
in sub-paragraph (3)(b) for “paragraph 4(4) of Schedule 11 to FA
35
1996” substitute “section 391(3)(b) of CTA 2009”.
     (10)
In paragraph 20—
(a)
in sub-paragraph (b) for “section 75(9) of that Act (relief of expenses
and charges against future profits)” substitute “section 1223 of CTA
2009 (carrying expenses forward)”,
40
(b)
in sub-paragraph (c)—
(i)
for “Schedule A business” substitute “UK property business”,
(ii)
for “Schedule A losses” substitute “UK property business
losses”, and
(iii)
for “that Act” substitute “ICTA”, and
45
(c)
in sub-paragraph (d) for “that Act” substitute “ICTA”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
707

     (11)
In paragraph 21(1) for “Schedule A business” substitute “UK property
business”.
521   (1)
Amend Schedule 1 (abbreviations and defined expressions) as follows.
      (2)
In Part 1 at the end insert—

“CTA 2009
The Corporation Tax Act 2009”

5
      (3)
In Part 2—
(a)
in the entry for “accounting period”, in the second column, for
“section 12 of ICTA” substitute “Chapter 2 of Part 2 of CTA 2009”,
(b)
after the entry for “car (in Part 2)” insert—

“the charge to
section 2(3) of CTA 2009 (as applied by

10

corporation
section 834(1) of ICTA)”,

tax on income

(c)
in the entry for “overseas property business”, for the words in the
second column substitute “Chapter 2 of Part 3 of ITTOIA 2005 (as
applied by section 989 of ITA 2007) and Chapter 2 of Part 4 of CTA
15
2009 (as applied by section 834B of ICTA)”,
(d)
omit the entry for “Schedule A business”, and
(e)
in the entry for “UK property business”, in the second column, at the
end insert “and Chapter 2 of Part 4 of CTA 2009 (as applied by
section 834B of ICTA)”.
20
Finance Act 2001 (c. 9)
522
The Finance Act 2001 is amended as follows.
523
Omit section 70(1) and (2) (which introduces Schedule 22).
524
Omit Schedule 22 (remediation of contaminated land).
Finance Act 2002 (c. 23)
25
525
The Finance Act 2002 is amended as follows.
526
Omit section 53 (which introduces Schedule 12 to that Act).
527
Omit section 54 (which introduces Schedules 13 and 14 to that Act).
528
Omit section 55 (gifts of medical supplies and equipment).
529
Omit section 64 (adjustment on change of basis).
30
530   (1)
Amend section 65 (postponement of change to mark to market in certain
cases) as follows.
      (2)
In subsection (1) for “of Case I of Schedule D” substitute “applicable for the
purposes of section 35 of the Corporation Tax Act 2009 (charge on trade
profits)”.
35