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Session 2008 - 09
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Corporation Tax Bill


Corporation Tax Bill

xiii

 

253   

Regulations

Deductions for expenditure on sea walls

254   

Deduction for expenditure on sea walls

255   

Transfer of interest in premises

256   

Ending of lease of premises

257   

Transfer involving person within the charge to income tax

Mineral royalties

258   

Relief in respect of mineral royalties

Apportionments on sale of land

259   

Nature of item apportioned on sale of estate or interest in land

Mutual business

260   

Mutual business

Adjustment on change of basis

261   

Adjustment on change of basis

262   

Giving effect to positive and negative adjustments

Integral features

263   

Expenditure on integral features

Chapter 6

Commercial letting of furnished holiday accommodation

Introduction

264   

Overview of Chapter

Definition

265   

Meaning of “commercial letting of furnished holiday accommodation”

266   

Meaning of “relevant period” in sections 267 and 268

267   

Meaning of “qualifying holiday accommodation”

268   

Under-used holiday accommodation: averaging elections

Separate profit calculations

269   

Capital allowances and loss relief

 
 

Corporation Tax Bill

xiv

 

Chapter 7

Rent receivable in connection with a UK section 39(4) concern

Charge to tax on rent receivable in connection with a UK section 39(4) concern

270   

Charge to tax on rent receivable in connection with a UK section 39(4) concern

271   

Meaning of “rent receivable in connection with a UK section 39(4) concern”

Management expenses of owner of mineral rights

272   

Deduction for management expenses of owner of mineral rights

Mineral royalties

273   

Relief in respect of mineral royalties

274   

Meaning of “mineral lease or agreement” and “mineral royalties”

275   

Extended meaning of “mineral royalties” etc in Northern Ireland

276   

Power to determine what counts as “mineral royalties”

Chapter 8

Rent receivable for UK electric-line wayleaves

Charge to tax on rent receivable for UK electric-line wayleaves

277   

Charge to tax on rent receivable for a UK electric-line wayleave

278   

Meaning of “rent receivable for a UK electric-line wayleave”

279   

Extent of charge to tax

Chapter 9

Post-cessation receipts

Charge to tax on post-cessation receipts

280   

Charge to tax on post-cessation receipts

281   

Extent of charge to tax

Meaning of “post-cessation receipts”

282   

Basic meaning of “post-cessation receipt”

283   

Other rules about what counts as a “post-cessation receipt”

284   

Transfer of rights if transferee does not carry on UK property business

Deductions

285   

Allowable deductions

Election to carry back

286   

Election to carry back

 
 

Corporation Tax Bill

xv

 

Chapter 10

Supplementary

Priority rules

287   

Provisions which must be given priority over this Part

288   

Priority between Chapters within this Part

Other supplementary provisions

289   

Effect of company starting or ceasing to be within charge to corporation tax

290   

Overseas property businesses and overseas land: adaptation of rules

291   

Meaning of “lease” and “premises”

Part 5

Loan Relationships

Chapter 1

Introduction

Introduction

292   

Overview of Part

293   

Construction of references to profits or losses from loan relationships

294   

Matters treated as loan relationships

How profits and deficits from loan relationships are dealt with

295   

General rule: profits arising from loan relationships chargeable as income

296   

Profits and deficits to be calculated using credits and debits given by this Part

297   

Trading credits and debits to be brought into account under Part 3

298   

Meaning of trade and purposes of trade

299   

Charge to tax on non-trading profits

300   

Method of bringing non-trading deficits into account

301   

Calculation of non-trading profits and deficits from loan relationships: non-

trading credits and debits

Chapter 2

Basic definitions

302   

“Loan relationship”, “creditor relationship”, “debtor relationship”

303   

“Money debt”

304   

“Related transaction”

305   

Payments, interest, rights and liabilities under a loan relationship

 
 

Corporation Tax Bill

xvi

 

Chapter 3

The credits and debits to be brought into account: general

Introduction

306   

Overview of Chapter

General principles about the bringing into account of credits and debits

307   

General principles about the bringing into account of credits and debits

Amounts recognised in determining a company’s profit or loss

308   

Amounts recognised in determining a company’s profit or loss

309   

Companies without GAAP-compliant accounts

310   

Power to make regulations about recognised amounts

311   

Amounts not fully recognised for accounting purposes: introduction

312   

Determination of credits and debits where amounts not fully recognised

Accounting bases

313   

Basis of accounting: “amortised cost basis”, “fair value accounting” and “fair

value”

314   

Power to make regulations about changes from amortised cost basis

Adjustments on change of accounting policy

315   

Introduction to sections 316 to 319

316   

Change of accounting policy involving change of value

317   

Carrying value

318   

Change of accounting policy following cessation of loan relationship

319   

General power to make regulations about changes in accounting policy

Rules differing from generally accepted accounting practice

320   

Credits and debits treated as relating to capital expenditure

321   

Credits and debits recognised in equity

322   

Release of debts: cases where credits not required to be brought into account

323   

Meaning of expressions relating to insolvency etc

324   

Restriction on debits resulting from revaluation

325   

Restriction on credits resulting from reversal of disallowed debits

326   

Writing off government investments

327   

Disallowance of imported losses etc

Exchange gains and losses

328   

Exchange gains and losses

Pre-loan relationship, abortive and pre-trading expenses

329   

Pre-loan relationship and abortive expenses

330   

Debits in respect of pre-trading expenditure

 
 

Corporation Tax Bill

xvii

 

Company ceasing to be party to loan relationship

331   

Company ceasing to be party to loan relationship

332   

Repo, stock lending and other transactions

Company moving abroad

333   

Company ceasing to be UK resident

334   

Non-UK resident company ceasing to hold loan relationship for UK

permanent establishment

Chapter 4

Continuity of treatment on transfers within groups or on reorganisations

Application of this Chapter

335   

Introduction to Chapter

336   

Transfers of loans on group transactions

337   

Transfers of loans on insurance business transfers

338   

Meaning of company replacing another as party to loan relationship

339   

Issues of new securities on certain cross-border reorganisations

Continuity of treatment: transfer of loan at notional carrying value

340   

Group transfers and transfers of insurance business: transfer at notional

carrying value

341   

Transferor using fair value accounting

342   

Issues of new securities on reorganisations: disposal at notional carrying

value

343   

Receiving company using fair value accounting

Transferee leaving group after replacing transferor as party to loan relationship

344   

Introduction

345   

Transferee leaving group otherwise than because of exempt distribution

346   

Transferee leaving group because of exempt distribution

Disapplication of Chapter where transferor party to avoidance

347   

Disapplication of Chapter where transferor party to avoidance

Chapter 5

Connected companies relationships: introduction and general

348   

Introduction: meaning of “connected companies relationship”

349   

Application of amortised cost basis to connected companies relationships

350   

Companies beginning to be connected

351   

Companies ceasing to be connected

352   

Disregard of related transactions

 
 

Corporation Tax Bill

xviii

 

Chapter 6

Connected companies relationships: impairment losses and releases of debts

Introduction

353   

Introduction to Chapter

Exclusion of debits for impaired or released connected companies debts

354   

Exclusion of debits for impaired or released connected companies debts

355   

Cessation of connection

356   

Exception to section 354: swapping debt for equity

357   

Exception to section 354: insolvent creditors

Exclusion of credits for connected companies debts on release or reversal of impairments

358   

Exclusion of credits on release of connected companies debts: general

359   

Exclusion of credits on release of connected companies debts during

creditor’s insolvency

360   

Exclusion of credits on reversal of impairments of connected companies debts

Deemed debt releases on impaired debts becoming held by connected company

361   

Acquisition of creditor rights by connected company at undervalue

362   

Parties becoming connected where creditor’s rights subject to impairment

adjustment

363   

Companies connected for sections 361 and 362

Chapter 7

Group relief claims involving impaired or released consortium debts

364   

Introduction to Chapter

365   

Reduction of impairment loss debits where group relief claimed

366   

Effect where credit for release brought into account on amortised cost basis

367   

Reduction of credits exceeding impairment losses

368   

Reduction of claims where there are earlier net consortium debits

369   

Carry forward of claims where there are no net consortium debits

370   

Group accounting periods

371   

Interpretation

Chapter 8

Connected parties relationships: late interest

372   

Introduction to Chapter

373   

Late interest treated as not accruing until paid in some cases

374   

Connection between debtor and person standing in position of creditor

375   

Loans to close companies by participators etc

376   

Interpretation of section 375

377   

Party to loan relationship having major interest in other party

378   

Loans by trustees of occupational pension schemes

379   

Persons indirectly standing in the position of creditor

 
 

Corporation Tax Bill

xix

 

Chapter 9

Partnerships involving companies

380   

Partnerships involving companies

381   

Determinations of credits and debits by company partners: general

382   

Company partners using fair value accounting

383   

Lending between partners and the partnership

384   

Treatment of exchange gains and losses

385   

Company partners’ shares where firm owns deeply discounted securities

Chapter 10

Insurance companies

Introduction

386   

Overview of Chapter

Treatment of deficit on basic life assurance and general annuity business

387   

Treatment of deficit on basic life assurance and general annuity business:

introduction

388   

Basic rule: deficit set off against income and gains of deficit period

389   

Claim to carry back deficit

390   

Meaning of “available profits”

391   

Carry forward of surplus deficit to next accounting period

Exclusion of loan relationships of members of Lloyd’s

392   

Exclusion of loan relationships of members of Lloyd’s

Determination of questions requiring apportionments

393   

General rules for some debtor relationships

394   

Special rules for some debtor relationships

Chapter 11

Other special kinds of company

Investment trusts’ and venture capital trusts’ creditor relationships

395   

Investment trusts: profits or losses of a capital nature

396   

Venture capital trusts: profits or losses of a capital nature

Credit unions

397   

Credit unions

 
 

 
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Revised 9 December 2008