Corporation Tax Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
680

353
Omit section 126(2) and (3) (pools payments for football ground
improvements).
354
In Schedule 14 (amendments correcting errors in ICTA) omit paragraph 2.
Finance Act 1991 (c. 31)
355
The Finance Act 1991 is amended as follows.
5
356
For section 65(5) (reimbursement by defaulter in respect of certain
abandonment expenditure) substitute—
“(5)
For the purposes of subsection (4) above, the relevant accounting
period is the accounting period in which the reimbursement
expenditure is received by the contributing participator or, if the
10
contributing participator—
(a)
ceases to carry on the ring fence trade before the receipt of the
reimbursement expenditure, or
(b)
ceases to be within the charge to corporation tax in respect of
the ring fence trade before the receipt of the reimbursement
15
expenditure,

the last accounting period of that trade or (as the case requires) the
accounting period during or at the end of which the contributing
participator ceased to be within the charge to corporation tax in
respect of the trade.”
20
357
Omit section 121(2) and (3) (pools payments to support games etc).
Taxation of Chargeable Gains Act 1992 (c. 12)
358
The Taxation of Chargeable Gains Act 1992 is amended as follows.
359
In section 1(2) (the charge to tax) for “section 6 of the Taxes Act” substitute
“section 2 of CTA 2009”.
25
360
In section 10B (non-resident company with United Kingdom permanent
establishment) for subsection (4) substitute—
“(4)
In this section—
(a)
references to a trade include an office, and
(b)
references to carrying on a trade include holding an office.”
30
361
In section 33A (value shifting: modification of sections 30 to 33 in relation to
chargeable intangible asset)—
(a)
in subsection (1) for “Schedule 29 to the Finance Act 2002” substitute
“Part 8 of CTA 2009”,
(b)
in subsection (2)—
35
(i)
in paragraph (a) for “that Schedule (see paragraph 19 of that
Schedule” substitute “that Part (see section 734 of that Act”,
(ii)
in paragraph (b) for “paragraph 55 of that Schedule”
substitute “section 775 of that Act”, and
(iii)
in paragraph (c) for “paragraph 58 or 60 of that Schedule”
40
substitute “section 780 or 785 of that Act”,
(c)
in subsection (3) for “that Schedule (see paragraph 15 of that
Schedule” substitute “that Part (see section 723 of that Act”, and
(d)
in subsection (4) for “that Schedule” substitute “that Part”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
681

362
In section 40(4) (interest charged to capital) after “relationships)” insert “and
CTA 2009 (Part 5 of which re-enacts that Chapter)”.
363
In section 41(4) (restriction of losses by reference to capital allowances)—
(a)
in paragraph (b)—
(i)
omit “any relief given under section 30 of the Taxes Act or”,
5
and
(ii)
after “ITTOIA 2005” insert “or section 254 of CTA 2009”, and
(b)
in paragraph (c)—
(i)
omit “section 91 of the Taxes Act or”, and
(ii)
after “ITTOIA 2005” insert “or section 147 of CTA 2009.”
10
364
In section 48(4) (consideration due after time of disposal) for the words from
“Chapter 2” to the end substitute “Part 5 of CTA 2009 (see sections 302(5) and
313(6))”.
365   (1)
Amend section 59 (partnerships) as follows.
      (2)
In subsection (2)(b) after “capital gains tax” insert “or corporation tax”.
15
      (3)
In subsection (3)—
(a)
after “arrangements” insert “(so far as providing for that relief)”, and
(b)
after “capital gains tax” insert “or corporation tax”.
366   (1)
Amend section 116 (reorganisations, conversions and reconstructions) as
follows.
20
      (2)
In subsection (8A)—
(a)
in the first sentence, for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of CTA 2009” and “that
Part” respectively, and
(b)
in the second sentence for the words from “transaction” to the end
25
substitute “relevant loan relationship transaction”.
      (3)
After subsection (8A) insert—
“(8AA)
In subsection (8A) “relevant loan relationship transaction” means a
transaction to which any of the following provisions applies—
section 342 of CTA 2009 (continuity of treatment on transfers
30
within groups or reorganisations: issues of new securities on
reorganisations: disposal at notional carrying value),
section 343 of that Act (continuity of treatment on transfers
within groups or reorganisations: receiving company using
fair value accounting),
35
section 424 of that Act (European cross-border transfers of
business: reorganisations involving loan relationships),
section 425 of that Act (European cross-border transfers of
business: original holder using fair value accounting),
section 435 of that Act (European cross-border mergers:
40
reorganisations involving loan relationships),
section 436 of that Act (European cross-border mergers: original
holder using fair value accounting).”
      (4)
In subsection (16) for “section 80(5) of the Finance Act 1996” and “Chapter II
of Part IV” substitute “section 464(1) of CTA 2009” and “Part 5” respectively.
45

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
682

367
After section 116 insert—
“116A
Holding beginning or ceasing to fall within section 490 of CTA 2009
(1)
Section 116 applies in accordance with the following assumptions
if—
(a)
a holding that is a relevant holding for the purposes of section
5
490 of CTA 2009 (holdings in OEICs, unit trusts and offshore
funds treated as creditor relationship rights) is held by a
company both at the end of one accounting period and at the
beginning of the next, and
(b)
that section applies to the holding for one of those periods but
10
not for the other.
(2)
The assumptions in subsections (3) and (4) apply for the purposes of
this Act if the accounting period for which section 490 of CTA 2009
applies to the relevant holding is the first of those periods.
(3)
The relevant holding is assumed to have ceased to be a relevant
15
holding for the second of those periods as a result of a transaction
such as is mentioned in section 116(1) (“the reorganisation
transaction”) occurring at the beginning of that period.
(4)
In relation to the reorganisation transaction within subsection (3), for
the purposes of section 116—
20
(a)
the relevant holding immediately before the beginning of the
second of those periods is assumed to be the old asset, and
(b)
the relevant holding immediately after the beginning of that
period is assumed to be the new asset.
(5)
The assumptions in subsections (6) and (8) apply for the purposes of
25
this Act if the accounting period for which section 490 of CTA 2009
applies to the relevant holding is the second of those periods.
(6)
The holding is assumed to have become a relevant holding for the
second of those periods as a result of the occurrence at the end of first
period of a transaction such as is mentioned in section 116(1).
30
(7)
But subsection (6) does not apply if the first of those periods is a
period at the end of which a disposal of the relevant holding is
treated as having occurred under section 212 (annual deemed
disposal of holdings of unit trusts etc by insurance companies).
(8)
In relation to the reorganisation transaction within subsection (6), for
35
the purposes of section 116—
(a)
the relevant holding immediately before the beginning of the
second of those periods is assumed to be the old asset, and
(b)
the relevant holding immediately after the beginning of that
period is assumed to be the new asset.
40
116B
Shares beginning or ceasing to be shares to which section 523 of CTA
2009 applies
(1)
If at any time section 523 of CTA 2009 (application of Part 5 of that
Act to certain shares as rights under a creditor relationship) begins or
ceases to apply in the case of a share held by the investing company
45
it is treated for the purposes of this Act—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
683

(a)
as having disposed of the share immediately before that time
for consideration of an amount equal to its fair value at that
time, and
(b)
as having immediately reacquired it for consideration of the
same amount.
5
(2)
In this section—
“fair value” has the same meaning as in Part 5 of CTA 2009,
(loan relationships) (see section 313(6) of that Act), and
“investing company” has the same meaning as it has for the
purposes of Chapter 7 of Part 6 of that Act (shares with
10
guaranteed returns) (see section 522(3) of that Act).”
368
In section 117(6D) (meaning of “qualifying corporate bond”) after “section
48A” insert “of that Act or section 507 of CTA 2009”.
369
In section 143(1) (commodity and financial futures and qualifying
options)—
15
(a)
for “section 128 of the Taxes Act” substitute “section 981 of CTA
2009”, and
(b)
in paragraph (a) for “Schedule D otherwise than as the profits of a
trade” substitute “Chapter 8 of Part 10 of CTA 2009”.
370
After section 151D insert—
20
“151E
Exchange gains and losses from loan relationships: regulations
(1)
The Treasury may by regulations make provision for or in
connection with bringing into account in prescribed circumstances
for the purposes of this Act amounts to which section 328(1) of CTA
2009 does not apply because of section 328(3) or (4) of that Act.
25
(2)
The regulations may—
(a)
make different provision for different cases, and
(b)
make provision subject to an election or to other prescribed
conditions.
151F
Treatment of alternative finance arrangements
30
(1)
This section applies if under arrangements to which section 503
(purchase and resale arrangements), 504 (diminishing shared
ownership arrangements) or 507 (investment bond arrangements) of
CTA 2009 applies an asset is sold by one party to the arrangements
to the other party.
35
(2)
The alternative finance return (as defined in section 511, 512 or 513(3)
of that Act, as the case may be) is excluded in determining for the
purposes of this Act the consideration for the sale and purchase of
the asset.
(3)
This section does not affect the operation of any provision of this Act
40
which provides that the consideration for a sale or purchase is to be
taken for any purpose to be an amount other than the actual
consideration.