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House of Commons

Session 2008 - 09 Internet Publications Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
The Bill is divided into four volumes. Volume I contains Clauses 1 to 476. Volume
II contains Clauses 477 to 906. Volume III contains Clauses 907 to 1330. Volume IV
contains the Schedules to the Bill.
EXPLANATORY NOTES
Explanatory notes to the Bill, prepared by Her Majesty’s Revenue and Customs, are
published separately in four volumes as Bill 1—EN.
EUROPEAN CONVENTION ON HUMAN RIGHTS
Mr Chancellor of the Exchequer has made the following statement under section
19(1)(a) of the Human Rights Act 1998:
In my view the provisions of the Corporation Tax Bill are compatible with the
Convention rights.
Bill 1                                                                                                   54/4
Corporation Tax Bill
The Bill is divided into four volumes. Volume I contains Clauses 1 to 476. Volume
II contains Clauses 477 to 906. Volume III contains Clauses 907 to 1330. Volume IV
contains the Schedules to the Bill.
Contents
Part 1
Introduction
1    Overview of Act
Part 2
Charge to corporation tax: basic provisions
Chapter 1
The charge to corporation tax
Charge to tax on profits
2    Charge to corporation tax
3    Exclusion of charge to income tax
4    Exclusion of charge to capital gains tax
General scheme of corporation tax
5    Territorial scope of charge
6    Profits accruing in fiduciary or representative capacity
7    Profits accruing under trusts
8    How tax is charged and assessed
Chapter 2
Accounting periods
9    Beginning of accounting period
10    End of accounting period
11    Companies with more than one accounting date
12    Companies being wound up
Bill 1                                                                                                   54/4
Corporation Tax Bill ii
Chapter 3
Company residence
13    Overview of Chapter
14    Companies incorporated in the United Kingdom
15    Continuation of residence established under common law
16    SEs which transfer registered office to the United Kingdom
17    SCEs which transfer registered office to the United Kingdom
18    Companies treated as non-UK resident under double taxation arrangements
Chapter 4
Non-UK resident companies: chargeable profits
Chargeable profits
19    Chargeable profits
20    Profits attributable to permanent establishment: introduction
The separate enterprise principle
21    The separate enterprise principle
22    Transactions treated as being on arm’s length terms
23    Provision of goods or services for permanent establishment
24    Application to insurance companies
The separate enterprise principle: application to non-UK resident banks
25    Non-UK resident banks: introduction
26    Transfer of financial assets
27    Loans: attribution of financial assets and profits arising
28    Borrowing: permanent establishment acting as agent or intermediary
Rules about deductions
29    Allowable deductions
30    Restriction on deductions: costs
31    Restriction on deductions: payments in respect of intangible assets
32    Restriction on deductions: interest or other financing costs
Chapter 5
Supplementary
33    Trade includes office
Corporation Tax Bill iii
Part 3
Trading income
Chapter 1
Introduction
34    Overview of Part
Chapter 2
Income taxed as trade profits
Charge to tax on trade profits
35    Charge to tax on trade profits
Trades and trade profits
36    Farming and market gardening
37    Commercial occupation of woodlands
38    Commercial occupation of land other than woodlands
39    Profits of mines, quarries and other concerns
40    Credit unions
Starting and ceasing to trade
41    Effect of company starting or ceasing to be within charge to corporation tax
Trading income and property income
42    Tied premises
43    Caravan sites where trade carried on
44    Surplus business accommodation
45    Payments for wayleaves
Chapter 3
Trade profits: basic rules
46    Generally accepted accounting practice
47    Losses calculated on same basis as profits
48    Receipts and expenses
49    Items treated as receipts and expenses
50    Animals kept for trade purposes
51    Relationship between rules prohibiting and allowing deductions
52    Apportionment etc of profits and losses to accounting period
Chapter 4
Trade profits: rules restricting deductions
53    Capital expenditure
Corporation Tax Bill iv
54    Expenses not wholly and exclusively for trade and unconnected losses
55    Bad debts
56    Car or motor cycle hire
57    Car or motor cycle hire: supplementary
58    Hiring cars (but not motor cycles) with low CO2 emissions before 1 April 2013
59    Patent royalties
60    Expenditure on integral features
Chapter 5
Trade profits: rules allowing deductions
Pre-trading expenses
61    Pre-trading expenses
Tenants under taxed leases
62    Tenants under taxed leases: introduction
63    Tenants occupying land for purposes of trade treated as incurring expenses
64    Limit on deductions if tenant entitled to mineral extraction allowance
65    Tenants dealing with land as property employed for purposes of trade
66    Restrictions on section 63 expenses: lease premium receipts
67    Restrictions on section 63 expenses: lease of part of premises
Renewals
68    Replacement and alteration of trade tools
Payments for restrictive undertakings
69    Payments for restrictive undertakings
Seconded employees
70    Employees seconded to charities and educational establishments
71    Educational establishments
Contributions to agents’ expenses
72    Payroll deduction schemes: contributions to agents’ expenses
Counselling and retraining expenses
73    Counselling and other outplacement services
74    Retraining courses
75    Retraining courses: recovery of tax
Redundancy payments etc
76    Redundancy payments and approved contractual payments
77    Payments in respect of employment wholly in employer’s trade
78    Payments in respect of employment in more than one capacity
79    Additional payments
Corporation Tax Bill v
80    Application of section 79 in cases involving partnerships
81    Payments made by the Government
Contributions to local enterprise organisations or urban regeneration companies
82    Contributions to local enterprise organisations or urban regeneration
companies
83    Meaning of “local enterprise organisation”
84    Approval of local enterprise agencies
85    Supplementary provisions with respect to approvals
86    Meaning of “urban regeneration company”
Scientific research
87    Expenses of research and development
88    Payments to research associations, universities etc
Expenses connected with patents, designs and trade marks
89    Expenses connected with patents
90    Expenses connected with designs or trade marks
Export Credits Guarantee Department
91    Payments to Export Credits Guarantee Department
Levies under FISMA 2000
92    Levies etc under FISMA 2000
Chapter 6
Trade profits: receipts
Capital receipts
93    Capital receipts
Debts released
94    Debts incurred and later released
Amounts received following earlier cessation
95    Acquisition of trade: receipts from transferor’s trade
Reverse premiums
96    Reverse premiums
97    Excluded cases
98    Tax treatment of reverse premiums
99    Arrangements not at arm’s length
100    Connected persons and property arrangements

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