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
708

      (3)
In subsection (2)(b) for “section 42 of the Finance Act 1998” substitute
“section 46 of the Corporation Tax Act 2009”.
531
Omit section 71 (accounting method where rate of interest etc is reset).
532
In section 81(3)(b) (transitional provision) for “Chapter 2 of Part 4 of the
Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.
5
533
In section 83 (derivative contracts) omit subsections (1)(a) and (2).
534
Omit section 84(1) (gains and losses from intangible fixed assets of
company).
535
Omit Schedule 12 (tax relief for expenditure on research and development).
536
Omit Schedule 13 (tax relief for expenditure on vaccine research etc).
10
537
In Schedule 16 (community investment tax relief) in paragraph 27(4) omit
“under Case VI of Schedule D”.
538   (1)
Amend Schedule 18 (relief for community amateur sports clubs) as follows.
      (2)
In paragraph 4(4) for the words from “means” to the end substitute “profits
that (apart from this paragraph) are chargeable under Chapter 2 of Part 3 of
15
CTA 2009 and are—
(a)
profits of a trade carried on wholly or partly in
the United Kingdom, or
(b)
profits of an activity other than a trade.”
      (3)
In paragraph 5(3)(a) for the words from “on” to the end substitute “which
20
(apart from this paragraph) would be required to be brought into account
under Part 5 of the Corporation Tax Act 2009 (loan relationships) as a non-
trading credit of the club;”.
      (4)
Omit paragraph 9(3)(a).
539
Omit Schedule 22 (computation of profits: adjustment on change of basis).
25
540   (1)
Amend Schedule 23 (exchange gains and losses from loan relationships etc)
as follows.
      (2)
Omit paragraph 25 (anti-avoidance: change of accounting period).
      (3)
In paragraph 26 (deferred foreign exchange gains)—
(a)
in sub-paragraph (2)—
30
(i)
in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act
1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act
2009”,
(ii)
in paragraph (b) for “that Chapter” substitute “that Part”, and
(iii)
in paragraph (c) for “section 82(2) of the Finance Act 1996”
35
substitute “section 297(2) of the Corporation Tax Act 2009”,
and
(b)
in sub-paragraph (5) for “subsection (8) of section 84A of the Finance
Act 1996” and “subsection (9)” substitute “section 328(5) of the
Corporation Tax Act 2009” and “subsection (6)” respectively.
40
541
In Schedule 25 (loan relationships) omit paragraphs 61 to 64.
542
Omit Schedule 26 (derivative contracts).

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
709

543   (1)
Schedule 28 (derivative contracts: transitional provisions etc) is amended as
follows.
      (2)
Omit paragraph 1 (anti-avoidance: change of accounting period).
      (3)
After paragraph 2(4) (qualifying contracts to which company ceases to be
party before commencement day) insert—
5
   “(4A)
In relation to a subsequent accounting period ending on or after 1
April 2009, the reference in sub-paragraph (4) to Schedule 26 is to
be read as a reference to Part 7 of the Corporation Tax Act 2009.”
      (4)
Omit paragraph 3 (qualifying contracts which become derivative contracts).
      (5)
After paragraph 4(7) (contracts which became derivative contracts:
10
chargeable assets) insert—
   “(7A)
In relation to an accounting period ending on or after 1 April 2009,
the reference in sub-paragraph (7) to Chapter 2 of Part 4 of the
Finance Act 1996 is to be read as a reference to Part 5 of the
Corporation Tax Act 2009.”
15
      (6)
After paragraph 5(9) (contracts: election to treat as two assets) insert—
   “(9A)
In relation to an accounting period ending on or after 1 April 2009,
the reference in sub-paragraph (9) to Chapter 2 of Part 4 of the
Finance Act 1996 is to be read as a reference to Part 5 of the
Corporation Tax Act 2009.”
20
      (7)
After paragraph 6(8) (contracts which become derivative contracts: contracts
within Schedule 5AA to ICTA) insert—
   “(8A)
In relation to an accounting period ending on or after 1 April
2009—
(a)
the reference in sub-paragraph (7) to paragraph 14(3) of
25
Schedule 26 is to be read as a reference to section 574 of the
Corporation Tax Act 2009,
(b)
the reference in that sub-paragraph to Chapter 2 of Part 4
of the Finance Act 1996 is to be read as a reference to Part 5
of the Corporation Tax Act 2009, and
30
(c)
the references in sub-paragraph (8) to Schedule 26 are to be
read as references to Part 7 of the Corporation Tax Act
2009.”
544
Omit Schedule 29 (gains and losses of a company from intangible fixed
assets).
35
Proceeds of Crime Act 2002 (c. 29)
545
The Proceeds of Crime Act 2002 is amended as follows.
546   (1)
Amend Schedule 10 (tax) as follows.
      (2)
In paragraph 9—
(a)
in sub-paragraph (1) for “section 84” to “that Act)” substitute “Part 5
40
of the Corporation Tax Act 2009 (loan relationships)”, and
(b)
in sub-paragraph (2) for the words “that Chapter” substitute “that
Part”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
710

      (3)
In paragraph 11—
(a)
in sub-paragraph (3) for the words from “section 100” to the end
substitute “section 173 of ITTOIA 2005 or section 162 of the
Corporation Tax Act 2009 (valuation of trading stock on cessation).”,
and
5
(b)
in sub-paragraph (4) for the words from “section 100” to the end
substitute “section 174 of ITTOIA 2005 or (as the case may be) section
163 of the Corporation Tax Act 2009.”
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
547
The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
10
548
In section 61(1) (interpretation) in the definition of “business” for “or
Schedule A business” substitute “within the meaning of Chapter 2 of Part 3
of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009”.
549
In section 178(d) (exception for loans where interest qualifies for tax relief)
for “, or a Schedule A business,” substitute “(within the meaning of Chapter
15
2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.
550
In section 180(5)(d) (threshold for benefit of loan to be treated as earnings)
for “, or a Schedule A business,” substitute “(within the meaning of Chapter
2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.
551   (1)
Amend section 357 (business entertainment and gifts: exception where
20
employer’s expenses disallowed) as follows.
      (2)
In subsection (2) for “section 577 of ICTA” substitute “section 1298 of CTA
2009”.
      (3)
In subsection (3) for “that section” substitute “section 1298 of CTA 2009”.
552
In section 420(1)(h) (meaning of securities etc) at the end insert “or section
25
507 of CTA 2009 (investment bond arrangements)”.
553   (1)
Amend section 515 (which refers to other provisions which deal with share
incentive plans) as follows.
      (2)
Omit subsection (1).
      (3)
In subsection (2)—
30
(a)
omit the “and” immediately after paragraph (c), and
(b)
after paragraph (d) insert “, and
(e)
Chapter 1 of Part 11 of CTA 2009 (share incentive
plans)”.
554
In section 702(5B) (which sets out what shares are corporation tax
35
deductible) for “Schedule 23 to the Finance Act 2003” substitute “Part 12 of
CTA 2009”.
555
In Schedule 1 (abbreviations and defined expressions)—
(a)
in Part 1 at the end insert—

“CTA 2009
The Corporation Tax Act 2009”, and

40

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
711

(b)
in Part 2 omit the entries for “Schedule A business” and “UK
property business”.
556
In Schedule 2 (approved share incentive plans), in paragraph 85(1)(c), for
“paragraph 11 of Schedule 4AA to ICTA” substitute “section 998 of CTA
2009”.
5
Finance Act 2003 (c. 14)
557
The Finance Act 2003 is amended as follows.
558
Omit section 141 (corporation tax for employee share acquisitions).
559
Omit section 143 (restriction of deductions for employee benefit
contributions).
10
560
In section 148 (meaning of “permanent establishment”)—
(a)
in subsection (5A)—
(i)
for “as defined by Chapter 5 of Part 2 of the Finance Act 2005”
substitute “within section 47(6) or (7), 47A(5), 48B(1) or
49A(2) of the Finance Act 2005 or section 511, 512 or 513(2) or
15
(3) of the Corporation Tax Act 2009”, and
(ii)
for “the arrangements falling within that section” substitute
“the alternative finance arrangements in question”, and
(b)
omit subsection (5B).
561   (1)
Amend section 150 (non-resident companies: assessment, collection and
20
recovery of corporation tax) as follows.
      (2)
In subsection (2) for “section 11(2A) of the Taxes Act 1988” substitute
“section 19 of the Corporation Tax Act 2009”.
      (3)
In subsection (7) omit the words from “; and” to the end.
      (4)
After subsection (7) insert—
25
“(7A)
In this section references to carrying on a trade include holding an
office.”
562
In section 152(2) (non-resident companies: transactions carried out through
broker, investment manager or Lloyd’s agent) for “section 11AA of the
Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax Act
30
2009”.
563
After section 177(4) (currency contracts and currency options) insert—
“(4A)
In relation to a subsequent accounting period ending on or after 1
April 2009, the reference in subsection (4)(c) to Schedule 26 is to be
read as a reference to Part 7 of the Corporation Tax Act 2009.”
35
564
In section 195(9)(b) (companies acquiring their own shares) for the words
from “in accordance with” to the end substitute “under Chapter 2 of Part 3
of the Corporation Tax Act 2009”.
565
Omit Schedule 23 (corporation tax relief for employee share acquisitions).
566
Omit Schedule 24 (restriction of deductions for employee benefit
40
contributions).

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
712

567
In paragraph 5A(2) of Schedule 26 (non-resident companies: transactions
through broker, investment manager or Lloyd’s agent) for “section 11AA of
the Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax
Act 2009”.
Finance Act 2004 (c. 12)
5
568
The Finance Act 2004 is amended as follows.
569
In section 71 (collection and recovery of sums to be deducted) omit
subsection (3)(b) and the “and” immediately before it.
570
In section 83(4) (giving through the self-assessment return)—
(a)
after “section 505(1)(c)(ii)” insert “or (iiza) or, so far as relating to
10
annual payments from a source in the United Kingdom, (iizb)”, and
(b)
for “Case III of Schedule D” substitute “section 299 of the
Corporation Tax Act 2009 or Chapter 5 or 7 of Part 10 of that Act”.
571   (1)
Amend section 131 (companies in partnership) as follows.
      (2)
In subsection (4) for the words from “annual” to the end substitute “an
15
amount—
“(a)
which is equal to the chargeable amount, and
(b)
to which the charge to corporation tax on income applies.”
      (3)
In subsection (10) for “section 91H or 91I of the Finance Act 1996” substitute
“Chapter 8 of Part 6 of the Corporation Tax Act 2009 (returns from
20
partnerships)”.
572   (1)
Amend section 196 (relief for employers in respect of contributions paid) as
follows.
      (2)
In subsection (2) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”.
25
      (3)
In subsection (3) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of
CTA 2009”.
573
In section 196A(4) (power to restrict relief)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
30
(b)
in paragraph (b) for “section 75 of ICTA” substitute “section 1219 of
CTA 2009”.
574
In section 197(10) (spreading of relief)—
(a)
in paragraph (a), for “(trading income) or Case I or II of Schedule D,”
substitute “or Part 3 of CTA 2009 (trading income),” and
35
(b)
in paragraph (b) for the words from “section 75” to the end substitute
“section 76 of ICTA (expenses of insurance companies) or Chapter 2
of Part 16 of CTA 2009 (expenses of management: companies with
investment business), an accounting period.”
575
In section 199A(10) (indirect contributions)—
40
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
713

576
In section 200 (no other relief for employers in respect of contributions)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
5
577   (1)
Amend section 246 (restriction of deduction for non-contributory provision)
as follows.
      (2)
In subsection (2)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
10
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
      (3)
In subsection (3)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D,”
substitute “or Part 3 of CTA 2009 (trading income),” and
15
(b)
in paragraph (b) for “of section 75 or 76 of ICTA in relation to the
employer,” substitute “in relation to the employer of section 76 of
ICTA or Chapter 2 of Part 16 of CTA 2009,”.
578
In section 246A(4) (case where no relief for provision by an employer)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
20
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
579
In section 280(1) (abbreviations and general index)—
(a)
omit the “and” immediately after the entry for “ITTOIA 2005”, and
25
(b)
after the entry for “ITA 2007” insert “, and
“CTA 2009” means the Corporation Tax Act 2009.”
580   (1)
Amend Schedule 26 (offshore funds) as follows.
      (2)
In paragraph 1(6) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute
“Part 5 of the Corporation Tax Act 2009”.
30
      (3)
In paragraph 2(6) in the definition of “derivative contract” for “Schedule 26
to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”.
Energy Act 2004 (c. 20)
581
The Energy Act 2004 is amended as follows.
582   (1)
Amend section 27 (tax exemption for NDA activities) as follows.
35
      (2)
In subsection (8)—
(a)
in the definition of “trading income”—
(i)
in paragraph (a), after “trade” insert “carried on wholly or
partly in the United Kingdom”, and
(ii)
in paragraph (b) for “Case I of Schedule D” substitute
40
“Chapter 2 of Part 3 of the Corporation Tax Act 2009”, and
(b)
in the definition of “trading losses”—
(i)
after “trade” insert “carried on wholly or partly in the United
Kingdom”, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
714

(ii)
for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of
the Corporation Tax Act 2009”.
      (3)
In subsection (9)—
(a)
in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c.
8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
5
(b)
in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (c.23)
(derivative contracts)” substitute “in accordance with Part 7 of the
Corporation Tax Act 2009 (derivative contracts)”.
583   (1)
Amend section 28 (taxation of activities of the Nuclear Decommissioning
Authority chargeable under Case VI of Schedule D) as follows.
10
      (2)
In subsection (1)—
(a)
in paragraph (a) for “under Case VI of Schedule D” substitute “under
or by virtue of any provision to which section 834A of the Income
and Corporation Taxes Act 1988 (miscellaneous charges) applies”,
and
15
(b)
in the words after paragraph (b) for “Case I of Schedule D” substitute
“Chapter 2 of Part 3 of the Corporation Tax Act 2009”.
      (3)
In subsection (2)(b) for the words from “under” to the end substitute “under
or by virtue of a provision to which section 834A of the Income and
Corporation Taxes Act 1988 applies, other than section 979 of the
20
Corporation Tax Act 2009 (income not otherwise charged).”
      (4)
In the title for “Case VI of Schedule D” substitute “miscellaneous
provisions”.
584
In section 44(2) (extinguishment of BNFL losses for tax purposes)—
(a)
in paragraph (b) for “under Case VI of Schedule D” substitute “under
25
or by virtue of any provision to which section 834A of the Income
and Corporation Taxes Act 1988 (miscellaneous charges) applies”,
(b)
in paragraph (c) for “section 75(9) of the Income and Corporation
Taxes Act 1988” substitute “section 1223 of the Corporation Tax Act
2009 (carrying forward expenses of management and other
30
amounts)”,
(c)
in paragraph (d) for “Schedule A losses” and “that Act” substitute
“UK property business losses” and “the Income and Corporation
Taxes Act 1988” respectively, and
(d)
in paragraph (h) for “subsection (1) of section 83 of the Finance Act
35
1996 (c. 8)” and “subsection (3A) of that section” substitute “section
456(1) of the Corporation Tax Act 2009” and “section 457(1) of that
Act” respectively.
585   (1)
Amend Schedule 9 (taxation provisions relating to nuclear transfer schemes)
as follows.
40
      (2)
In paragraph 11—
(a)
in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996
(c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996”
and “that Chapter” substitute “Part 5 of the Corporation Tax Act
45
2009” and “that Part” respectively.
      (3)
In paragraph 12—