Corporation Tax Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 21 — Other provisions
778

Part 19
Unremittable income
Unremittable income that arose in an accounting period ending before 1 April 2009
134   (1)
A claim may be made under section 1275 (claim for relief for unremittable
income) for an accounting period ending after 31 March 2009, despite the
5
income having arisen in an accounting period ending before 1 April 2009.
      (2)
Section 1276 (withdrawal of relief) applies for an accounting period ending
after 31 March 2009, despite the income having arisen originally in an
accounting period ending before 1 April 2009 (whether the claim in respect
of it was made under section 584 of ICTA (relief for unremittable overseas
10
income) or section 1275 of this Act).
Withdrawal of relief: income that arose in an accounting period ending before 1 October 1993
135
Section 1277 (income charged on withdrawal of relief after source ceases)
does not apply if the income originally arose in an accounting period ending
before 1 October 1993.
15
Part 20
General exemptions
Ulster savings certificates
136
In the case of certificates acquired before 27 July 1981, in section 1282(4) for
“the Department of Finance and Personnel” substitute “the Treasury”.
20
Part 21
Other provisions
Training courses for employees
137   (1)
This paragraph applies if, without the repeal by this Act of section 588 of
ICTA (training courses for employees)—
25
(a)
section 588(5) of ICTA would operate in relation to an employee by
virtue of paragraph (a) of that provision and paragraph 37 of
Schedule 7 to ITEPA 2003 (savings in relation to tax years before
2003-04),
(b)
section 588(5) of ICTA would operate in relation to an employer by
30
virtue of paragraph (b) of that provision and paragraph 37 of
Schedule 7 to ITEPA 2003, or
(c)
section 588(6) and (7) of ICTA would operate in relation to an
employer by virtue of paragraph 37 of Schedule 7 to ITEPA 2003.
      (2)
That repeal does not apply in relation to—
35
(a)
the operation of section 588(5) of ICTA in relation to the employee as
mentioned in sub-paragraph (1)(a),
(b)
the operation of section 588(5) of ICTA in relation to the employer as
mentioned in sub-paragraph (1)(b), or

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 21 — Other provisions
779

(c)
the operation of section 588(6) and (7) of ICTA in relation to the
employer as mentioned in sub-paragraph (1)(c).
138
In the Table in section 98 of TMA 1970 (special returns etc)—
(a)
the entry relating to section 588(6) of ICTA, and
(b)
the entry relating to section 588(7) of ICTA,
5

continue to have effect (despite the repeal by this Act of those entries) in
relation to section 588(6) and (7) as it has effect by virtue of paragraph 137.
139   (1)
This paragraph applies if—
(a)
at any time during the period beginning with 6 April 2003 and
ending with 31 March 2009, a company (“the employer”) incurred
10
expenditure in paying or reimbursing retraining course expenses
within the meaning of section 311 of ITEPA 2003,
(b)
the employer’s liability to corporation tax for any accounting period
has been determined (before or after 1 April 2009, and by assessment
or otherwise) on the assumption that, by virtue only of subsection (3)
15
(or subsections (3) and (4)) of section 588 of ICTA, the employer is
entitled to a deduction on account of the expenditure, and
(c)
before 1 April 2009, no assessment has been made under paragraph
41 of Schedule 18 to FA 1998 by virtue of section 588(5) of ICTA of an
amount due in consequence of the failure by the person in respect of
20
whom the expenditure was incurred to meet a condition of the kind
mentioned in section 312(1)(b)(i) or (ii) of ITEPA 2003.
      (2)
Section 75 (retraining courses: recovery of tax) applies in relation to the
employer as if the condition in subsection (1) of that section were met.
      (3)
Section 76ZE of ICTA (provision for companies carrying on life assurance
25
provision corresponding to section 75) applies in relation to the employer as
if the condition in subsection (1) of that section were met.
      (4)
In the application of section 75 of this Act and section 76ZE of ICTA to the
employer, references to “the employee” are to the person in respect of whom
the expenditure was incurred by the employer.
30
Unpaid remuneration
140   (1)
This paragraph applies for the purposes of—
(a)
section 1288 of this Act (unpaid remuneration), and
(b)
section 76ZL of ICTA (corresponding provision for companies
carrying on life assurance business).
35
      (2)
In relation to a period of account ending before 27 November 2002, an
amount charged in the accounts in respect of employees’ remuneration
includes an amount which is held by an intermediary with a view to its
becoming employees’ remuneration.
      (3)
In relation to a period of account ending on or after 27 November 2002, an
40
amount charged in the accounts in respect of employees’ remuneration
includes an amount—
(a)
in respect of employee benefit contributions (within the meaning of
sections 1290 to 1296) made before that date, and
(b)
which is held by an intermediary,
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with a view to its becoming employees’ remuneration.

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 21 — Other provisions
780

Employee benefit contributions
141
Section 1290 does not apply to deductions that would otherwise be
allowed—
(a)
for a period ending before 27 November 2002, or
(b)
in respect of employee benefit contributions made before that date.
5
Interest on overdue corporation tax etc
142   (1)
The repeal by this Act of section 90(1)(b) of TMA 1970 does not affect the
following rules.
      (2)
In calculating profits for any corporation tax purpose, no deduction is
allowed for interest payable under section 86 of TMA 1970 (interest on
10
overdue tax for accounting periods ending before 1 October 1993).
      (3)
In calculating profits for any corporation tax purpose, no deduction is
allowed for interest payable under section 87 of TMA 1970 (interest on
overdue advance corporation tax and income tax on company payments) or
section 87A of TMA 1970 (interest on overdue corporation tax etc) on—
15
(a)
corporation tax for accounting periods ending before 1 July 1999, or
(b)
tax assessable in accordance with Schedule 13 or 16 of ICTA for
return periods in accounting periods ending before 1 July 1999.
Miscellaneous profits and losses: apportionment to accounting periods ending before 1 April
2009
20
143   (1)
This paragraph applies if—
(a)
a relevant period of account begins before 1 April 2009 and ends on
or after that date, and
(b)
in order to arrive at the profits or losses of an accounting period
ending before 1 April 2009 it is necessary to apportion the profits or
25
losses of the relevant period of account to any part of that period
before 1 April 2009.
      (2)
A period of account is a “relevant period” if—
(a)
section 1307 applies to the period of account, and
(b)
the profits or losses of the part of the period of account falling in an
30
accounting period ending after 31 March 2009 are calculated in
accordance with this Act.
      (3)
The profits or losses of the relevant period of account—
(a)
are calculated in accordance with this Act (and therefore, to that
extent, this Act has effect for accounting periods ending before 1
35
April 2009), and
(b)
may be apportioned in accordance with section 1307 to any part of
the period of account falling in an accounting period ending before 1
April 2009.
Purchase and sale of securities: references to setting up and commencement etc of a trade
40
144
In section 731 of ICTA, as that section has effect in accordance with section
66(6) of FA 2008 (purchase and sale of securities: securities purchased before
1 April 2008)—

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 21 — Other provisions
781

(a)
the reference in subsection (7) to the setting up and commencement
of a trade is to be read as including any event that would be treated
as the setting up and commencement of the trade if sections 114(1)
and 337(1) of ICTA were not repealed by this Act, and
(b)
the reference in subsection (8) to the deemed discontinuance of a
5
trade is to be read as including any event that would be treated as the
discontinuance of the trade if sections 114(1) and 337(1) of ICTA were
not repealed by this Act.
References to Companies Act 2006
145
Until section 658 of the Companies Act 2006 (c. 46) (rule against limited
10
company acquiring own shares) comes into force, references to that section
in sections 807B(3)(f)(ii) and 807D(7)(b) of ICTA (which are inserted by
Schedule 1 to this Act) have effect as if they were references to section 143 of
the Companies Act 1985 (c. 6).
Charges to tax under Case VI of Schedule D in subordinate legislation
15
146   (1)
This paragraph applies if—
(a)
a provision of the Corporation Tax Acts (“the rule”) contains a
reference such as is mentioned in section 834A(1) of ICTA (that is, a
reference to any provision to which section 834A of ICTA applies),
(b)
immediately before 1 April 2009 the reference was to Case VI of
20
Schedule D (or, if the rule rewrites a provision that is repealed by this
Act, the corresponding reference in that provision was to Case VI of
Schedule D), and
(c)
by virtue of that reference, the rule (or the provision that it rewrites)
then applied in relation to amounts charged, under a provision of
25
subordinate legislation, to corporation tax under Case VI of Schedule
D.
      (2)
As long as the provision of subordinate legislation continues to be expressed
by reference to Case VI of Schedule D, the Corporation Tax Acts have effect
as if it were listed in the table in section 834A(2) of ICTA.
30
      (3)
In this paragraph “subordinate legislation” has the same meaning as in the
Interpretation Act 1978 (c. 30).
147   (1)
This paragraph applies if immediately before 1 April 2009 a provision of
subordinate legislation (within the meaning of the Interpretation Act 1978)
treated amounts as losses incurred in a transaction in respect of which a
35
person is within the charge to corporation tax under Case VI of Schedule D.
      (2)
As long as the provision continues to be expressed by reference to Case VI
of Schedule D, it has effect as if it treated the amounts as losses incurred in a
transaction in respect of which the person is within the charge to corporation
tax under a provision to which section 834A of ICTA applies.
40
Tribunal reform
148   (1)
Until such time as—
(a)
the functions of the Commissioners for general purposes of the
income tax established under section 2 of TMA 1970, and

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 21 — Other provisions
782

(b)
the functions of the Commissioners for special purposes of the
Income Tax Acts established under section 4 of that Act,

are transferred to the First-tier Tribunal or Upper Tribunal, this Act has
effect with the following modifications.
      (2)
For section 171 substitute—
5

“171 Determination of questions by Commissioners
(1)
Any question arising under section 164(3) or sections 165 to 167 (sale
basis of valuation of trading stock) must be determined by the
General or Special Commissioner in the same way as an appeal
(2)
If the same General Commissioners have jurisdiction in relation to
10
each of the persons whose trade, profession or vocation is concerned
(including any person within the charge to income tax), the question
must be determined by those Commissioners.
(3)
But this does not apply if all parties concerned agree that the
questions should be determined by the Special Commissioners.
15
(4)
In any other case, the question must be determined by the Special
Commissioners.”
      (3)
For section 242 substitute—

“242 Determination by Special Commissioners or General
Commissioners
20
(1)
If a notice of objection is given under section 240(3), the amount
mentioned in section 240(1) must be determined—
(a)
by the Special Commissioners, or
(b)
by a body of General Commissioners agreed on by the first
taxpayer and all persons who have given a notice of
25
objection.
(2)
The determination must be made in the same way as an appeal.
(3)
All persons to whom provisional notices of determination have been
given under section 240(2) may take part—
(a)
in any proceedings under subsection (1), and
30
(b)
in any appeal arising out of those proceedings.
(4)
Those persons are bound by the determination made in the
proceedings or on appeal, whether or not they have taken part in the
proceedings.
(5)
Their successors in title are bound in the same way.”
35
      (4)
In section 428 for “tribunal”, in each place where it occurs, substitute
“Special Commissioners”.
      (5)
In section 679 for “tribunal”, in each place where it occurs, substitute
“Special Commissioners”.
      (6)
In section 833 for “tribunal”, in each place where it occurs, substitute
40
“Special Commissioners”.

Corporation Tax Bill
Schedule 3 — Repeals and revocations
Part 1 — Repeals and revocations on 1 April 2009
783

      (7)
In Schedule 2 at the end of paragraph 134 insert—
    “(3)
Sub-paragraph (4) applies if an appeal against an assessment for
an accounting period ending after 31 March 2009 involves a
question as to the operation of section 584 of ICTA or Part 18 of this
Act as respects income that arose in an accounting period ending
5
before 1 April 2009.
      (4)
Paragraph 94 of Schedule 18 to FA 1998 (election to take appeal to
Special Commissioners) applies with the omission of—
(a)
paragraph (b) of sub-paragraph (2),
(b)
the word “or” preceding that paragraph, and
10
(c)
sub-paragraphs (3) to (6) (by virtue of which such an
election may be disregarded if the General Commissioners
so direct).”
      (8)
In Schedule 4 omit the entry relating to “tribunal”.
Schedule 3
15
Section 1326

Repeals and revocations
Part 1
Repeals and revocations on 1 April 2009

Reference
Extent of repeal or revocation

Taxes Management Act 1970
Section 12AE.

20

(c. 9)
Section 19(2).

Section 31(3).

In section 42(7)—

(a)
in paragraph (a) the words “84, 91B,

101(2)” and “504, 531”,

25

(b)
paragraph (b), and

(c)
the “and” immediately after paragraph

(e).

In section 71(1), the words from “Subject to” to

“companies),”.

30

In section 90—

(a)
in subsection (1), paragraph (b) and the

“and” immediately before that

paragraph, and

(b)
subsection (2).

35

In the first column of the Table in section 98—

(a)
the entry relating to section 38(5) of

ICTA,

(b)
the entry relating to section 588(7) of

ICTA, and

40

(c)
the entry relating to paragraph 10 of

Schedule 5 to ICTA.

Corporation Tax Bill
Schedule 3 — Repeals and revocations
Part 1 — Repeals and revocations on 1 April 2009
784

Reference
Extent of repeal or revocation

Taxes Management Act 1970
In the second column of the Table in section

(c. 9)—cont.
98—

(a)
the entry relating to section 577(4) of

ICTA, and

5

(b)
the entry relating to section 588(6) of

ICTA.

In Schedule 3, in paragraph 10, the word

“102(1),”.

Oil Taxation Act 1975 (c. 22)
In section 3(2), in the first sentence, the words

10

“under subsection (2) of section 579 of the

Taxes Act or”, and “that subsection or”.

Income and Corporation Taxes
In section 6—

Act 1988 (c. 1)
(a)
subsections (1) to (3),

(b)
in subsection (4), the words from “,

15

sections” to “248”, and

(c)
subsection (4A).

Section 8.

In section 9—

(a)
subsections (1) to (4),

20

(b)
in subsection (5), the words “, by virtue

of this section or otherwise,”, and

(c)
subsection (6).

Section 11(1) to (2A).

Section 11AA.

25

Section 12(1) to (7ZA) and (9).

Section 15.

Section 18.

Sections 21A to 21C.

In section 24—

30

(a)
in subsection (1), the definitions of

“premises” and “premium”,

(b)
subsections (2) to (4),

(c)
in subsection (5), the definitions of

“intermediate landlord”, “premium” and

35

“reversion”, and

(d)
subsection (6)(a).

Section 30.

Sections 31ZA to 31ZC.

Sections 34 to 40.

40

In section 42, subsection (1)(a) and the “or”

immediately after it.

Section 46.

Section 53.

Section 55.

45

Section 70.

Section 70A.

Section 72.

Section 74.

Sections 75 to 75B.

50