|
| |
|
64 | Limit on deductions if tenant entitled to mineral extraction allowance |
| |
(1) | This section applies if the tenant under the taxed lease has become entitled, in |
| |
respect of expenditure on the acquisition of an interest in the land subject to the |
| |
taxed lease, to an allowance for an accounting period under Part 5 of CAA 2001 |
| |
(mineral extraction allowances) in respect of expenditure falling within section |
| 5 |
403 of that Act (qualifying expenditure on acquiring a mineral asset). |
| |
(2) | If the allowance is in respect of the whole of the expenditure, no deduction is |
| |
allowed for expenses under section 63 for a qualifying day falling within that |
| |
or a later accounting period. |
| |
(3) | If the allowance is in respect of only part of the expenditure (“the allowable |
| 10 |
part”) the amount of the deduction for expenses under section 63 for a |
| |
qualifying day falling within that or a later accounting period is calculated by |
| |
multiplying the amount that, apart from this section, would be the amount of |
| |
the deduction for the qualifying day by—![equation: over[plus[times[char[W],char[E]],minus[times[char[A],char[P]]]],times[char[W],char[
E]]]](missing.gif) |
| |
| 15 |
WE is the whole of the expenditure, and |
| |
AP is the allowable part of the expenditure. |
| |
65 | Tenants dealing with land as property employed for purposes of trade |
| |
(1) | This section applies if the tenant under the taxed lease— |
| |
(a) | does not occupy the land subject to the taxed lease, or a part of it, but |
| 20 |
(b) | deals with its interest in the land, or the part of it, as property employed |
| |
for the purposes of carrying on a trade. |
| |
(2) | Section 63 applies as if the land or the part of it were occupied by the tenant for |
| |
the purposes of the trade. |
| |
(3) | But the tenant is not treated as incurring an expense in respect of the land for a |
| 25 |
qualifying day as a result of this section so far as the tenant is treated as |
| |
incurring an expense under section 232 (tenants under taxed leases treated as |
| |
incurring expenses) in respect of the land for the day in calculating the profits |
| |
of the tenant’s property business. |
| |
(4) | This section is subject to sections 66 and 67 (restrictions on section 63 expenses |
| 30 |
where the additional calculation rule is relevant). |
| |
66 | Restrictions on section 63 expenses: lease premium receipts |
| |
(1) | This section applies if a lease has been granted out of the taxed lease and— |
| |
(a) | in calculating the amount of a receipt of a property business under |
| |
Chapter 4 of Part 4 (profits of property businesses: lease premiums etc) |
| 35 |
in respect of the lease, there is a reduction under section 228 (the |
| |
additional calculation rule) by reference to the taxed receipt, or |
| |
(b) | in calculating the amount of a receipt of a property business under |
| |
Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease |
| |
premiums etc) in respect of the lease, there is a reduction under section |
| 40 |
|
| |
|
| |
|
288 of that Act (the additional calculation rule) by reference to the taxed |
| |
| |
| In this section and section 67 the receipt that is so reduced is referred to as a |
| |
| |
(2) | Subsections (3) to (5) provide for the application of section 63 as a result of |
| 5 |
section 65 for a qualifying day that falls within the receipt period of the lease |
| |
| |
(3) | The tenant under the taxed lease is treated as incurring an expense under |
| |
section 63 as a result of section 65 for the qualifying day by reference to the |
| |
taxed receipt only if the daily amount of the taxed receipt exceeds the daily |
| 10 |
reduction of the lease premium receipt. |
| |
(4) | If the condition in subsection (3) is met, the amount of that expense for the |
| |
qualifying day by reference to the taxed receipt is equal to that excess. |
| |
(5) | If the qualifying day falls within the receipt period of more than one lease |
| |
premium receipt, the reference in subsection (3) to the daily reduction of the |
| 15 |
lease premium receipt is to be read as a reference to the total of the daily |
| |
reductions of each of the lease premium receipts whose receipt period includes |
| |
| |
| |
the “daily amount” of the taxed receipt is given by the formula—![equation: over[char[A],times[char[T],char[R],char[P]]]](missing.gif) |
| 20 |
| |
A is the unreduced amount of the taxed receipt, and |
| |
TRP is the number of days in the receipt period of the taxed receipt, and |
| |
| |
the “daily reduction” of a lease premium receipt is given by the formula—![equation: over[times[char[A],char[R]],times[char[R],char[R],char[P]]]](missing.gif) |
| 25 |
| |
AR is the reduction under section 228 below or section 288 of ITTOIA |
| |
2005 by reference to the taxed receipt, and |
| |
RRP is the number of days in the receipt period of the lease premium |
| |
| 30 |
(7) | In this section references to a reduction under section 228 below or section 288 |
| |
of ITTOIA 2005 by reference to a taxed receipt have the same meaning as in |
| |
Chapter 4 of Part 4 (see section 230(6)). |
| |
(8) | Section 67 explains how this section operates if the lease does not extend to the |
| |
whole of the premises subject to the taxed lease. |
| 35 |
67 | Restrictions on section 63 expenses: lease of part of premises |
| |
(1) | This section applies if— |
| |
(a) | section 66 applies, and |
| |
|
| |
|
| |
|
(b) | the lease granted out of the taxed lease does not extend to the whole of |
| |
the premises subject to the taxed lease. |
| |
(2) | Subsections (3) to (5) apply for a qualifying day that falls within the receipt |
| |
period of the lease premium receipt. |
| |
(3) | Sections 63, 65 and 66 apply separately in relation to the part of the premises |
| 5 |
subject to the lease and to the remainder of the premises. |
| |
| |
(a) | more than one lease that does not extend to the whole of the premises |
| |
subject to the taxed lease has been granted out of the taxed lease, and |
| |
(b) | the qualifying day falls within the receipt period of two or more lease |
| 10 |
premium receipts that relate to different leases, |
| |
| sections 63, 65 and 66 apply separately in relation to each part of the premises |
| |
subject to a lease to which such a lease premium receipt relates and to the |
| |
remainder of the premises. |
| |
(5) | Where sections 63, 65 and 66 apply in relation to a part of the premises, A |
| 15 |
becomes the amount calculated by multiplying the unreduced amount of the |
| |
taxed receipt by the fraction of the premises constituted by the part. |
| |
(6) | This fraction is calculated on a just and reasonable basis. |
| |
| |
68 | Replacement and alteration of trade tools |
| 20 |
(1) | This section applies if— |
| |
(a) | expenses are incurred on replacing or altering any tool used for the |
| |
| |
(b) | a deduction for the expenses would not otherwise be allowable in |
| |
calculating the profits of the trade because (and only because) they are |
| 25 |
items of a capital nature. |
| |
(2) | In calculating the profits of the trade, a deduction is allowed for the expenses. |
| |
(3) | In this section “tool” means any implement, utensil or article. |
| |
Payments for restrictive undertakings |
| |
69 | Payments for restrictive undertakings |
| 30 |
(1) | In calculating the profits of a trade, a deduction is allowed for a payment— |
| |
(a) | which is treated as earnings of an employee by virtue of section 225 of |
| |
ITEPA 2003 (payments for restrictive undertakings), and |
| |
(b) | which is made, or treated as made for the purposes of section 226 of that |
| |
Act (valuable consideration given for restrictive undertakings), by the |
| 35 |
company carrying on the trade. |
| |
(2) | The deduction is allowed for the accounting period in which the payment— |
| |
| |
(b) | is treated as made for the purposes of section 226 of ITEPA 2003. |
| |
|
| |
|
| |
|
| |
70 | Employees seconded to charities and educational establishments |
| |
(1) | This section applies if a company carrying on a trade (“the employer”) makes |
| |
the services of a person employed for the purposes of the trade available to— |
| |
| 5 |
(b) | an educational establishment, |
| |
| on a basis that is stated and intended to be temporary. |
| |
(2) | In calculating the profits of the trade, a deduction is allowed for expenses of the |
| |
employer that are attributable to the employee’s employment during the |
| |
period of the secondment. |
| 10 |
| |
“educational establishment” means— |
| |
(a) | in England and Wales, any of the bodies mentioned in section |
| |
| |
(b) | in Scotland, any of the bodies mentioned in section 71(2), |
| 15 |
(c) | in Northern Ireland, any of the bodies mentioned in section |
| |
| |
(d) | any other educational body which is for the time being |
| |
approved for the purposes of this section by the Secretary of |
| |
State or, in Northern Ireland, the Department of Education, and |
| 20 |
“the period of the secondment” means the period for which the |
| |
employee’s services are made available to the charity or educational |
| |
| |
71 | Educational establishments |
| |
(1) | A body in England and Wales is an educational establishment for the purposes |
| 25 |
| |
(a) | a local education authority, |
| |
(b) | an educational institution maintained or otherwise supported by a |
| |
local education authority, |
| |
(c) | an independent school within the meaning of the Education Act 1996 |
| 30 |
(c. 56) registered under section 161 of the Education Act 2002 (c. 32), or |
| |
(d) | an institution within the further education sector, or the higher |
| |
education sector, within the meaning of the Further and Higher |
| |
Education Act 1992 (c. 13). |
| |
(2) | A body in Scotland is an educational establishment for the purposes of section |
| 35 |
| |
(a) | an education authority within the meaning of the Education (Scotland) |
| |
| |
(b) | an educational establishment within the meaning of the Education |
| |
(Scotland) Act 1980 managed by an education authority within the |
| 40 |
| |
(c) | a public or grant-aided school within the meaning of the Education |
| |
| |
(d) | an independent school within the meaning of the Education (Scotland) |
| |
| 45 |
|
| |
|
| |
|
(e) | a central institution within the meaning of the Education (Scotland) Act |
| |
| |
(f) | an institution within the higher education sector within the meaning of |
| |
section 56(2) of the Further and Higher Education (Scotland) Act 1992 |
| |
| 5 |
(g) | a college of further education within the meaning of section 36(1) of the |
| |
Further and Higher Education (Scotland) Act 1992. |
| |
(3) | A body in Northern Ireland is an educational establishment for the purposes |
| |
| |
(a) | an education and library board within the meaning of the Education |
| 10 |
and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)), |
| |
(b) | a college of education, a grant-aided school or an independent school |
| |
within the meaning of the Education and Libraries (Northern Ireland) |
| |
| |
(c) | an institution of further education within the meaning of the Further |
| 15 |
Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)). |
| |
Contributions to agents’ expenses |
| |
72 | Payroll deduction schemes: contributions to agents’ expenses |
| |
(1) | This section applies if— |
| |
(a) | a company carrying on a trade (“the employer”) is liable to make |
| 20 |
payments to an individual, |
| |
(b) | income tax falls to be deducted from those payments as a result of |
| |
| |
(c) | the employer withholds sums from those payments in accordance with |
| |
an approved scheme and pays the sums to an approved agent. |
| 25 |
(2) | In calculating the profits of the employer’s trade, a deduction is allowed for |
| |
expenses incurred by the employer in making a payment to the agent for |
| |
| |
(a) | have been incurred, or |
| |
| 30 |
| by the agent in connection with the agent’s functions under the scheme. |
| |
(3) | In this section “approved agent” and “approved scheme” have the same |
| |
meaning as in section 714 of ITEPA 2003. |
| |
Counselling and retraining expenses |
| |
73 | Counselling and other outplacement services |
| 35 |
(1) | In calculating the profits of a trade, a deduction is allowed for counselling |
| |
| |
(a) | the company carrying on the trade (“the employer”) incurs the |
| |
| |
(b) | the expenses are incurred in relation to a person (“the employee”) who |
| 40 |
holds or has held an office or employment under the employer for the |
| |
purposes of the trade, and |
| |
(c) | the relevant conditions are met. |
| |
|
| |
|
| |
|
(2) | In this section “counselling expenses” means expenses incurred— |
| |
(a) | in the provision of services to the employee in connection with the |
| |
cessation of the office or employment, |
| |
(b) | in the payment or reimbursement of fees for such provision, or |
| |
(c) | in the payment or reimbursement of travelling expenses in connection |
| 5 |
| |
(3) | In this section “the relevant conditions” means— |
| |
(a) | conditions A to D for the purposes of section 310 of ITEPA 2003 |
| |
(employment income exemptions: counselling and other outplacement |
| |
| 10 |
(b) | in the case of travel expenses, condition E for those purposes. |
| |
| |
(1) | In calculating the profits of a trade, a deduction is allowed for retraining course |
| |
| |
(a) | the company carrying on the trade (“the employer”) incurs the |
| 15 |
| |
(b) | they are incurred in relation to a person (“the employee”) who holds or |
| |
has held an office or employment under the employer for the purposes |
| |
| |
(c) | the relevant conditions are met. |
| 20 |
| |
“retraining course expenses” means expenses incurred in the payment or |
| |
reimbursement of retraining course expenses within the meaning given |
| |
by section 311(2) of ITEPA 2003, and |
| |
“the relevant conditions” means— |
| 25 |
(a) | the conditions in subsections (3) and (4) of section 311 of ITEPA |
| |
2003 (employment income exemptions: retraining courses), and |
| |
(b) | in the case of travel expenses, the conditions in subsection (5) of |
| |
| |
75 | Retraining courses: recovery of tax |
| 30 |
(1) | This section applies if— |
| |
(a) | an employer’s liability to corporation tax for an accounting period is |
| |
determined on the assumption that a deduction for expenditure is |
| |
allowed under section 74, and |
| |
(b) | the deduction would not otherwise have been allowed. |
| 35 |
| |
(a) | the condition in section 311(4)(a) of ITEPA 2003 is not met because of |
| |
the employee’s failure to begin the course within the period of one year |
| |
after ceasing to be employed, or |
| |
(b) | the condition in section 311(4)(b) of ITEPA 2003 is not met because of |
| 40 |
the employee’s continued employment or re-employment, |
| |
| an assessment of an amount or further amount of corporation tax due as a |
| |
result of the condition not being met may be made under paragraph 41 of |
| |
| |
|
| |
|
| |
|
(3) | Such an assessment must be made before the end of the period of 6 years |
| |
immediately following the end of the accounting period in which the failure to |
| |
meet the condition occurred. |
| |
(4) | If subsection (2) applies, the employer must give an officer of Revenue and |
| |
Customs a notice containing particulars of— |
| 5 |
(a) | the employee’s failure to begin the course, |
| |
(b) | the employee’s continued employment, or |
| |
(c) | the employee’s re-employment, |
| |
| within 60 days of coming to know of it. |
| |
(5) | If an officer of Revenue and Customs has reason to believe that the employer |
| 10 |
has failed to give such a notice, the officer may by notice require the employer |
| |
to provide such information as the officer may reasonably require for the |
| |
purposes of this section about— |
| |
(a) | the failure to begin the course, |
| |
(b) | the continued employment, or |
| 15 |
| |
(6) | A notice under subsection (5) may specify a time (not less than 60 days) within |
| |
which the required information must be provided. |
| |
| |
76 | Redundancy payments and approved contractual payments |
| 20 |
(1) | Sections 77 to 79 apply if— |
| |
(a) | a company (“the employer”) makes a redundancy payment or an |
| |
approved contractual payment to another person (“the employee”), |
| |
| |
(b) | the payment is in respect of the employee’s employment wholly in the |
| 25 |
employer’s trade or partly in the employer’s trade and partly in one or |
| |
| |
(2) | For the purposes of this section and sections 77 to 81 “redundancy payment” |
| |
means a redundancy payment payable under— |
| |
(a) | Part 11 of the Employment Rights Act 1996 (c. 18), or |
| 30 |
(b) | Part 12 of the Employment Rights (Northern Ireland) Order 1996 (S.I. |
| |
| |
(3) | For the purposes of this section and those sections— |
| |
“contractual payment” means a payment which, under an agreement, an |
| |
employer is liable to make to an employee on the termination of the |
| 35 |
employee’s contract of employment, and |
| |
a contractual payment is “approved” if, in respect of that agreement, an |
| |
| |
(a) | section 157 of the Employment Rights Act 1996, or |
| |
(b) | Article 192 of the Employment Rights (Northern Ireland) Order |
| 40 |
| |
77 | Payments in respect of employment wholly in employer’s trade |
| |
(1) | This section applies if— |
| |
|
| |
|