Corporation Tax Bill

House of Commons

Session 2008 - 09
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Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
645

217
In section 747(1B) (controlled foreign companies: company residence for
purposes of Chapter), for “section 249 of the Finance Act 1994” substitute
“section 18 of CTA 2009”.
218
In section 751(3) (controlled foreign companies: accounting periods) for
“subsections (3), (5) and (7) of section 12” substitute “sections 10(1) and (5),
5
11(1) and (2) and 12 of CTA 2009”.
219   (1)
Amend section 755A (treatment of chargeable profits and creditable tax
apportioned to company carrying on life assurance business) as follows.
      (2)
In subsection (5) for “Case I of Schedule D” substitute “section 35 of CTA
2009 (charge on trade profits)”.
10
      (3)
In subsection (7) for “Case I of Schedule D” substitute “section 35 of CTA
2009”.
      (4)
In subsection (11BA)—
(a)
for “Case I profits”, in both places where it occurs, substitute “section
35 profits”, and
15
(b)
for “provisions applicable to Case I of Schedule D” substitute “life
assurance trade profits provisions”.
220   (1)
Amend section 761 (charge to income tax or corporation tax of offshore
income gain) as follows.
      (2)
In subsection (1)(b)(ii) for “as a profit or gain under Case VI of Schedule D”
20
substitute “, under the charge to corporation tax on income,”.
      (3)
In subsection (2) for “section 11(2A)(c)” substitute “section 19(3)(c) of CTA
2009”.
221   (1)
Amend section 768B (change in ownership of company with investment
business: deductions generally) as follows.
25
      (2)
In subsection (6) for “section 75” substitute “Chapter 2 of Part 16 of CTA 2009
(companies with investment business) as”.
      (3)
In subsection (7) for “sections 338 and 75” substitute “section 338 above
(charges on income deducted from total profits) and Chapter 2 of Part 16 of
CTA 2009”.
30
      (4)
In subsection (8) for “section 75(7)” substitute “section 1233 of CTA 2009
(companies with investment business: excess capital allowances)”.
      (5)
In subsection (9) for “section 75” substitute “section 1219 of CTA 2009
(expenses of management of a company’s investment business)”.
      (6)
In subsection (10)—
35
(a)
omit “and non-trading deficits”,
(b)
for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5
of CTA 2009”,
(c)
for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”
substitute “section 574 of that Act”, and
40
(d)
at the end insert “and the non-trading deficits in respect of those
relationships that may be carried forward”.
      (7)
In subsection (13)—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
646

(a)
for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5
of CTA 2009”, and
(b)
for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”
substitute “section 574 of that Act”.
      (8)
In subsection (14) for “same meaning as in Part IV” substitute “meaning
5
given by section 1218 of CTA 2009”.
222   (1)
Amend section 768C (deductions: asset transferred within group) as follows.
      (2)
In subsection (7) for “section 75” substitute “section 1219 of CTA 2009
(expenses of management of a company’s investment business)”.
      (3)
In subsection (9)—
10
(a)
omit “and non-trading deficits”,
(b)
for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5
of CTA 2009”,
(c)
for “paragraph 14(3) of Schedule 26 to the Finance Act 2002”
substitute “section 574 of that Act”, and
15
(d)
at the end insert “and the non-trading deficits in respect of those
relationships that may be carried forward”.
      (4)
In subsection (12) for “same meaning as in Part 4” substitute “meaning given
by section 1218 of CTA 2009”.
      (5)
In subsection (13)—
20
(a)
for “Schedule 29 to the Finance Act 2002” substitute “Part 8 of CTA
2009”,
(b)
in paragraph (a) for “paragraph 55 of that Schedule” substitute
“section 775 of CTA 2009”,
(c)
in paragraph (b) for “that Act”, “that Schedule”, in the first place
25
where it occurs, and “a credit within paragraph 34(1)(a) of that
Schedule (non-trading credits)” substitute “the 1992 Act”, “that Part”
and “a non-trading credit for the purposes of that Part (see section
746 of that Act)” respectively,
(d)
in paragraph (c) for “that Schedule” substitute “that Part (see section
30
734(1) of that Act)”, and
(e)
in paragraph (d) for “Part 6 of that Schedule” substitute “Chapter 6
of that Part”.
223   (1)
Amend section 768D (change in ownership of company carrying on
property business) as follows.
35
      (2)
In subsection (1) for “Schedule A business” substitute “UK property
business”.
      (3)
In subsection (2) for “Schedule A loss” substitute “UK property business
loss”.
      (4)
In subsection (8)—
40
(a)
in paragraph (a) for “Schedule A business” substitute “UK property
business”, and
(b)
in paragraph (b) for “same meaning as in Part 4” substitute “meaning
given by section 1218 of CTA 2009”.
      (5)
In subsection (9) for “Schedule A business” substitute “UK property
45
business”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
647

224   (1)
Amend section 768E (change in ownership of company with unused non-
trading loss on intangible fixed assets) as follows.
      (2)
In subsections (1) and (4) for “paragraph 35 of Schedule 29 to the Finance Act
2002” substitute “section 753 of CTA 2009 (treatment of non-trading losses)”.
      (3)
In subsection (5) for “paragraph 35(3) of Schedule 29 to the Finance Act 2002”
5
substitute “section 753(3) of CTA 2009 (carry forward of non-trading
losses)”.
      (4)
In subsection (7) for “same meaning as in Part 4” substitute “meaning given
by section 1218 of CTA 2009”.
225
In section 774(1) (transactions between dealing company and associated
10
company) for “Case VI of Schedule D” substitute “the charge to corporation
tax on income”.
226
In section 774B(5) (disregard of intended effects of arrangement involving
disposal of assets)—
(a)
in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996”
15
substitute “Part 5 of CTA 2009”, and
(b)
in paragraph (b) for “that Chapter” substitute “that Part”.
227   (1)
Amend section 774D (disregard of intended effects of arrangement
involving change in relation to a partnership) as follows.
      (2)
In subsection (4) for “section 114 above” substitute “sections 1259 to 1265 of
20
CTA 2009”.
      (3)
In subsections (7)(a) and (10)(a), for “paragraph 19 of Schedule 9 to the
Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act)”
substitute “Chapter 9 of Part 5 of CTA 2009 (partnerships involving
companies) (and the other provisions of that Part)”.
25
228
In section 774E (sections 774B and 774D: exceptions)—
(a)
in the first sentence of subsection (3), in paragraph (a) for “Chapter 2
of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”,
(b)
in the second sentence of subsection (3) for “section 100” to “money)”
substitute “Chapter 2 of Part 6 of CTA 2009 (relevant non-lending
30
relationships)”,
(c)
in subsection (4)(b) after “securities)” insert “or Chapter 10 of Part 6
of CTA 2009 (repos)”, and
(d)
in subsection (4)(c) after “2005” insert “or Chapter 6 of Part 6 of CTA
2009”.
35
229
In section 774G(7) (sections 774A to 774D: minor definitions etc) for “section
34 above” substitute “sections 217 to 221 of CTA 2009”.
230   (1)
Amend section 775A (transfers of rights to receive annual payments) as
follows.
      (2)
In subsection (1), for “(4)” substitute “(2)”.
40
      (3)
For subsections (2) to (4) substitute—
“(2)
This section applies to any annual payment other than—
(a)
an annual payment under a life annuity;
(b)
an annual payment under a pension annuity;

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
648

(c)
an annual payment to which section 347A applies (certain
annual payments not to form part of the income of a company
for corporation tax purposes);
(d)
an annual payment in respect of which, by virtue of section
727 of ITTOIA 2005 (payments by individuals arising in UK),
5
no liability to income tax arises under Part 5 of that Act.
(3)
Where this section applies, the person who sells or transfers the right
to the annual payment shall be charged to tax for the chargeable
period in which the sale or transfer takes place on an amount equal
to the market value of the right to receive the annual payment.
10
(4)
So far as relating to corporation tax, the charge to tax under
subsection (3) has effect as an application of the charge to
corporation tax on income.”
231   (1)
Amend section 776 (transactions in land: taxation of capital gains) as follows.
      (2)
For subsections (3) and (3A) substitute—
15
“(3)
Where this section applies, then, subject to the following provisions
of this section, the company by which any such gain is realised shall
be chargeable to corporation tax, for the accounting period in which
the gain is realised, on the whole of the gain.
(3A)
The charge under subsection (3) has effect as an application of the
20
charge to corporation tax on income.”
      (3)
In subsection (6)—
(a)
in paragraph (a) for “Case I of Schedule D” substitute “Part 3 of CTA
2009”, and
(b)
in paragraph (b) for “subsections (2) and (3) of section 99 above”
25
substitute “section 136 of CTA 2009”.
      (4)
In subsection (7) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”.
      (5)
In subsection (8) for “(3)(b)” substitute “(3)”.
232   (1)
Amend section 779 (sale and lease-back: limitation on tax reliefs) as follows.
      (2)
For subsection (10) substitute—
30
“(10)
In this section references to rent under a lease include references to
expenses which the tenant under the lease is treated as incurring in
respect of the land subject to the lease under—
(a)
sections 61 to 67 or 292 to 297 of ITTOIA 2005, or
(b)
sections 63 to 67 or 232 to 234 of CTA 2009,
35

and such expenses are treated for the purposes of this section as
having been paid as soon as they have been incurred.”
      (3)
In subsection (13)—
(a)
omit paragraph (a),
(b)
in paragraph (c) for “profits or gains chargeable under Case VI of
40
Schedule D” substitute “profits or gains chargeable to corporation
tax under or by virtue of any provision to which section 834A
(miscellaneous charges) applies”,
(c)
in paragraph (d) leave out “75 or”, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
649

(d)
after paragraph (d) insert—
“(da)
a deduction under section 1219 of CTA 2009
(expenses of management of a company’s investment
business);”.
233
In section 780(3A) (sale and lease-back: taxation of consideration received)
5
for “as a profit or gain under Case VI of Schedule D” substitute “under the
charge to corporation tax on income”.
234   (1)
Amend section 781 (assets leased to traders and others) as follows.
      (2)
In subsection (1) omit the words from “(in” to “Schedule D)”.
      (3)
After subsection (1A) insert—
10
“(1B)
So far as relating to corporation tax, the charge to tax under
subsection (1) has effect as an application of the charge to
corporation tax on income.”
      (4)
In subsection (4)—
(a)
in paragraph (b) for “profits or gains chargeable under Case VI of
15
Schedule D” substitute “profits or gains chargeable to corporation
tax under or by virtue of any provision to which section 834A
(miscellaneous charges) applies”,
(b)
in paragraph (c) leave out “75 or”, and
(c)
after paragraph (c) insert—
20
“(ca)
a deduction under section 1219 of CTA 2009
(expenses of management of a company’s investment
business);”.
235
In section 782(9) (leased assets: special cases) omit the words from “, and
where” to the end.
25
236
In section 785 (definitions for purposes of sections 781 to 784), in the
definition of “capital sum” for “under Case VI of Schedule D” substitute
“under or by virtue of any provision to which section 834A (miscellaneous
charges) applies”.
237
In section 785ZA(3) (restrictions on use of losses: leasing partnerships) for
30
“section 114(2)” substitute “sections 1262 to 1264 of CTA 2009”.
238
In section 785ZB(8) (section 785ZA: definitions)—
(a)
in paragraph (a) for “(Schedule A losses)” substitute “(UK property
business losses)”, and
(b)
in paragraph (d) for “(Case VI losses)” substitute “(losses from
35
miscellaneous transactions)”.
239
In section 785C(4)(a) (section 785B: interpretation) for “under Schedule A”
substitute “under Chapter 3 of Part 4 of CTA 2009 as profits of a UK property
business”.
240
In section 785D(3) (section 785B: lease of plant and machinery and other
40
property) for “under Schedule A” substitute “under Chapter 3 of Part 4 of
CTA 2009 as profits of a UK property business”.
241   (1)
Amend section 786 (transactions associated with loans or credit) as follows.
      (2)
In subsection (3A)(b) for “chargeable to corporation tax under Case III of
Schedule D” substitute “which is from a source in the United Kingdom and
45

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
650

chargeable to corporation tax under Chapter 5 of Part 10 of CTA 2009
(distributions from unauthorised unit trusts) or Chapter 7 of that Part
(annual payments not otherwise charged).”
      (3)
In subsection (5)(b) for “Case VI of Schedule D” substitute “the charge to
corporation tax on income”.
5
242   (1)
Amend section 787 (restriction of relief for payments of interest) as follows.
      (2)
In subsection (1) for “Tax Acts” substitute “Income Tax Acts”.
      (3)
Omit subsection (1A).
      (4)
In subsection (2) omit “or total profits”.
      (5)
Omit subsection (3).
10
243
In section 788(7) (relief by agreement with other territories) omit the words
from “, and, in” to the end.
244
In section 790(11) (unilateral relief) omit the words from “, and, in” to the
end.
245
In section 795(4) (computation of income subject to foreign tax)—
15
(a)
in paragraph (a) for “section 80(5) of the Finance Act 1996” and
“Chapter II of Part 4” substitute “section 464(1) of CTA 2009” and
“Part 5” respectively, and
(b)
in paragraph (b) for “paragraph 1(3) of Schedule 29 to the Finance
Act 2002” and “that Schedule” substitute “section 906(1) of CTA
20
2009” and “Part 8 of that Act” respectively.
246   (1)
Amend section 797 (limits on credit: corporation tax) as follows.
      (2)
In subsection (2A) for the words from “section 11AA” to “under that section”
substitute “Chapter 4 of Part 2 of CTA 2009 (profits attributable to
permanent establishment), and of any regulations made under section 24 of
25
that Act”.
      (3)
In subsection (3A) for the words from “to which” to “relates,” substitute—
“(a)
which falls to be set off under section 388(1) of CTA 2009
(insurance companies: basic rule: deficit set off against
income and gains of deficit period), or
30
(b)
to which a claim under section 459(1)(a) of that Act (claim to
set off deficit against profits of deficit period) relates,”.
      (4)
In subsection (3B)(b) for “subsection (3A) of section 83 of the Finance Act
1996” substitute “section 457(1) of CTA 2009”.
      (5)
In subsection (6) for “paragraph 4 of Schedule 8 to the Finance Act 1996”
35
substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.
247   (1)
Amend section 797A (foreign tax on items giving rise to a non-trading credit:
loan relationships) as follows.
      (2)
In subsection (1)(a) for “Chapter II of Part IV of the Finance Act 1996”
substitute “Part 5 of CTA 2009”.
40
      (3)
In subsection (2)—
(a)
for “paragraph (a) of Case III of Schedule D” substitute “section 299
of CTA 2009”, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
651

(b)
omit “and gains”.
      (4)
In subsection (4) for “Chapter II of Part IV of the Finance Act 1996” substitute
“Part 5 of CTA 2009”.
      (5)
In subsection (5)—
(a)
in paragraph (a) for “subsection (2)(c)” to “that Act” substitute
5
“section 389(1) or 459(1)(b) of CTA 2009”, and
(b)
in paragraph (b) for “subsection (3A)” to “that Schedule” substitute
“section 391 or 457(1) of CTA 2009”.
      (6)
In subsection (6) for “section 83(3A) of that Act” substitute “section 457(1) of
CTA 2009”.
10
      (7)
In subsection (7)(c) for the words from “in pursuance” to the end of sub-
paragraph (ii) substitute “as the result of—
(i)
the application of section 388(1) of CTA 2009
(insurance companies: basic rule: deficit set off
against income and gains of deficit period), or
15
(ii)
a claim under section 459(1)(a) of that Act (claim to set
off deficit against profits of deficit period),”.
      (8)
In subsection (8) for “paragraph 4 of Schedule 8 to the Finance Act 1996”
substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.
248
In section 797B (foreign items giving rise to a non-trading credit: intangible
20
fixed assets)—
(a)
in subsection (1)(a) for “Schedule 29 to the Finance Act 2002”
substitute “Part 8 of CTA 2009”,
(b)
in subsection (2) for “Case VI of Schedule D” substitute “that Part of
that Act”, and
25
(c)
in subsection (4) for “Schedule 29 to the Finance Act 2002” and
“paragraph 35(3) of that Schedule” substitute “Part 8 of CTA 2009”
and “section 753(3) of that Act” respectively.
249   (1)
Amend section 798A (section 797: trade income) as follows.
      (2)
In subsection (4) for paragraphs (a) to (d) substitute—
30
“(a)
income chargeable to tax under Chapter 2 or 15 of Part 3 of
CTA 2009 (trade profits and post-cessation receipts),
(b)
income chargeable to tax under Chapter 3 or 9 of Part 4 of
CTA 2009 (profits of property businesses and post-cessation
receipts),
35
(c)
income which arises from a source outside the United
Kingdom and is chargeable to tax under section 979 of CTA
2009 (charge to tax on income not otherwise charged), and
(d)
any other income or profits which by a provision of this Act
is or are—
40
(i)
chargeable to tax under Chapter 2 of Part 3 of CTA
2009, or
(ii)
calculated in the same way as the profits of a trade;”.
      (3)
After subsection (4) insert—
“(5)
In subsection (4) the references—
45