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
684

151G
Regulations where non-qualifying shares conditions altered
(1)
If the Treasury make regulations under section 533 of CTA 2009
(power to change conditions for non-qualifying shares) adding,
varying or removing such a condition as is mentioned in subsection
(1) of that section, they may also by regulations amend this Act so as
5
to make provision for or in connection with taxation in the case of
any asset or transaction that is or was mentioned in the condition.
(2)
Regulations under this section may—
(a)
make different provision for different cases, and
(b)
make incidental, supplemental, consequential and
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transitional provisions and savings.
(3)
Regulations made under subsection (2)(b) may, in particular, include
provision amending any enactment or any instrument made under
an enactment.”
371
In section 156(4) (assets of Class 1)—
15
(a)
omit “section 98 of the Taxes Act or”, and
(b)
after “ ITTOIA 2005” insert “or section 42 of CTA 2009”.
372
After section 156 insert—
“156ZA
Intangible fixed assets: roll-over relief
(1)
This section applies if a company is entitled to relief under Chapter
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7 of Part 8 of CTA 2009 (roll-over relief in case of realisation and
reinvestment) as a result of—
(a)
section 898 of that Act (roll-over relief where pre-FA 2002
assets disposed of on or after 1 April 2002), or
(b)
section 899 of that Act (roll-over relief where degrouping
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charge on pre-FA 2002 asset arises on or after 1 April 2002).
(2)
The company is treated for the purposes of this Act as if the
consideration for the disposal of the old asset were reduced by the
amount available for relief.
(3)
Subsection (2) does not affect the treatment for any purpose of the
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Taxes Acts of the other party to any transaction involved in the
disposal of the old asset or the expenditure on other assets.
(4)
In this section—
“the old asset” has the same meaning as in Chapter 7 of Part 8 of
CTA 2009 (see section 754(2)), and
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“the Taxes Acts” means the enactments relating to income tax,
corporation tax or chargeable gains.
156ZB
Intangible fixed assets: interaction with relief under Chapter 7 of Part
8 of CTA 2009
(1)
This section applies if there is a disposal on or after 1 April 2002 of an
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asset that is both—
(a)
an asset of a class specified in section 155, and
(b)
an intangible fixed asset for the purposes of Part 8 of CTA
2009.
(2)
The period specified in section 152(3)—
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Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
685

(a)
does not include any period beginning on or after 1 April
2002, and
(b)
may not be extended so as to include any such period.
(3)
Classes 4 to 7A in section 155 do not apply for the purposes of
corporation tax as respects the acquisition of new assets that are
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chargeable intangible assets for the purposes of Part 8 of CTA 2009
(see section 741 of that Act).
(4)
In the case of an acquisition before 22 March 2005, subsection (3)
applies as if it referred to Classes 4 to 7, instead of Classes 4 to 7A.”
373
In section 158(2) (activities other than trades, and interpretation) omit the
10
words from “but” to the end.
374
In section 161(3)(a) (appropriations to and from stock) for “under Case I of
Schedule D” substitute “under Chapter 2 of Part 3 of CTA 2009 and the trade
is carried on wholly or partly in the United Kingdom”.
375
In section 170(9)(c) (interpretation of sections 171 to 181) omit “within the
15
meaning of section 486 of the Taxes Act”.
376
In section 171(3A) (transfers within a group: general provisions) for “section
91A of the Finance Act 1996” substitute “section 524 of CTA 2009”.
377
Omit section 201(2) (relationship between section 201 of TCGA 1992 and
section 119(1) of ICTA).
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378
For section 203(1) substitute—
“(1)
Sections 274 to 276 of CTA 2009 (meaning of “mineral royalties” etc)
apply for the interpretation of this section and sections 201 and 202
as they apply for the interpretation of Chapter 7 of Part 4 of CTA
2009.”
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379   (1)
Amend section 210A (ring-fencing of losses) as follows.
      (2)
In subsection (10A)—
(a)
for “Case I profits”, in both places where it occurs, substitute “life
assurance trade profits”, and
(b)
for “provisions applicable to Case I of Schedule D” substitute “life
30
assurance trade profits provisions”.
      (3)
In subsection (11)(c) (ring-fencing of losses) for “paragraph 4(3) of Schedule
11 to the Finance Act 1996” substitute “section 389(1) of CTA 2009”.
380   (1)
Amend section 241 (furnished holiday lettings) as follows.
      (2)
In subsection (2), in the second sentence for “has the meaning given by
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section 504 of the Taxes Act” substitute “has the same meaning as it has for
the purposes of Chapter 6 of Part 4 of CTA 2009”.
      (3)
In subsection (3)(a) omit “(within the meaning of the Income Tax Acts), or
any Schedule A business (within the meaning of the Taxes Act),”.
381
In section 251(8) (general provisions) omit—
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(a)
paragraph (a), and
(b)
in paragraph (b) the words “(even apart from those provisions)”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
686

382
In section 253(3) (relief for loans to traders) for “Chapter II of Part IV of the
Finance Act 1996” substitute “Part 5 of CTA 2009”.
383
In section 275B (section 275A: supplementary provisions) for subsection (3)
substitute—
“(3)
In section 275A—
5
“future” has the meaning given by section 581 of CTA 2009, and
“option” has the meaning given by section 580 of that Act.”
384
After section 286 insert—
“286A
Residence of companies
Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of
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companies) applies for the purposes of—
(a)
this Act (so far as relating to capital gains tax), and
(b)
any other enactment relating to capital gains tax,
as it applies for the purposes of the Corporation Tax Acts.”
385
In section 288(1) (interpretation)—
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(a)
at the appropriate place insert—
““CTA 2009” means the Corporation Tax Act 2009;”,
(b)
for the definition of “personal representatives” substitute—
““personal representatives” has the same meaning as in
Chapter 3 of Part 10 of CTA 2009 (see section 968 of
20
that Act);”,
(c)
in the definition of “trading stock” for “section 100(2) of the Taxes
Act” substitute “section 163 of CTA 2009”, and
(d)
at the appropriate place insert—
““UK property business” means—
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(a)
a UK property business within the meaning of the
Income Tax Acts (see section 989 of ITA 2007), or
(b)
a UK property business within the meaning of the
enactments relating to corporation tax (see section 834B
of the Taxes Act);”.
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386
In Schedule 7AC (exemptions for disposals by companies with substantial
shareholding) omit paragraph 34(2).
387
In Schedule 7D (approved share schemes and share incentives), in
paragraph 2(4), for “paragraph 9 of Schedule 4AA to the Taxes Act”
substitute “section 989 of CTA 2009”.
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388   (1)
Amend Schedule 8 (leases) as follows.
      (2)
In paragraph 5—
(a)
in sub-paragraph (1) for the words from “section 34” to “property
business (within the meaning of that Act)” substitute “any of sections
277 to 281 of ITTOIA 2005 or sections 217 to 221 of CTA 2009 as a
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receipt of a UK property business”,
(b)
in sub-paragraph (2) for the words from “section 34” to “property
business (within the meaning of that Act)” substitute “any of sections
277 to 281 of ITTOIA 2005 or sections 217 to 221 of CTA 2009 as a
receipt of a UK property business”,
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Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
687

(c)
in sub-paragraph (3) for the words from “section 36” to “property
business (within the meaning of that Act)” substitute “section 284 or
285 of ITTOIA 2005 or section 224 or 225 of CTA 2009 (sale of land
with right to reconveyance or leaseback) as a receipt of a UK
property business”, and
5
(d)
in sub-paragraph (5) omit paragraph (a).
      (3)
In the italic cross-heading before paragraph 5 for “under Schedule A”
substitute “as receipts of a property business”.
      (4)
In paragraph 6—
(a)
in sub-paragraph (1) for the words from “If” to the end of paragraph
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(b) substitute “If under section 292 of ITTOIA 2005 or section 232 of
CTA 2009 (allowance where, by the grant of a sublease, a lessee has
converted a capital amount into a right to income) a person is to be
treated as incurring expenses in consequence of having granted a
sublease,”
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(b)
in sub-paragraph (2) for the words from “by virtue of section 35” to
the end substitute “by virtue of section 282 of ITTOIA 2005 or section
222 of CTA 2009 (assignments for profit of lease granted at
undervalue) as a receipt of a UK property business.”, and
(c)
for sub-paragraph (3) substitute—
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    “(3)
If any adjustment is made—
(a)
under section 301 or 302 of ITTOIA 2005, or
(b)
under section 238 or 239 of CTA 2009,

on a claim made under that section, any necessary
adjustment shall be made to give effect to the
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consequences of the claim on the operation of this
paragraph or paragraph 5 above.”
      (5)
In paragraph 7 for paragraphs (a) and (b) substitute—
“(a)
under section 277 of ITTOIA 2005 any amount is brought
into account by virtue of section 278 of that Act as a receipt
30
of a UK property business which is carried on by any
person, or
(b)
under section 217 of CTA 2009 any amount is brought into
account by virtue of section 218 of that Act as a receipt of a
UK property business which is carried on by any
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company,”.
      (6)
In paragraph 7A omit “Schedule A business or”.
Finance (No. 2) Act 1992 (c. 48)
389
The Finance (No. 2) Act 1992 is amended as follows.
390   (1)
Amend paragraph 3 of Schedule 12 (banks etc in compulsory liquidation) as
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follows.
      (2)
In sub-paragraph (1), omit the words from “(in” to “Schedule D)”.
      (3)
After that sub-paragraph insert—
   “(1A)
So far as relating to corporation tax, the charge to tax under sub-
paragraph (1) has effect as an application of the charge to
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corporation tax on income.”

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
688

      (4)
In sub-paragraph (3)—
(a)
omit “section 100 of the Taxes Act 1988 or”, and
(b)
after “2005” insert “or section 162 of the Corporation Tax Act 2009”.
      (5)
In sub-paragraph (5) for the words from “section 80(5)” to the end substitute
“section 464(1) of the Corporation Tax Act 2009 (matters to be brought into
5
account in the case of loan relationships only under Part 5 of that Act)”.
      (6)
For the italic cross-heading before the paragraph substitute “Taxation of
certain receipts”.
Finance Act 1994 (c. 9)
391
The Finance Act 1994 is amended as follows.
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392   (1)
Amend section 219 (Lloyd’s underwriters: taxation of profits) as follows.
      (2)
In subsection (2)—
(a)
in paragraph (a) for “Case I of Schedule D” substitute “Part 3 of the
Corporation Tax Act 2009”, and
(b)
in paragraph (b) for the words from “under” to the end substitute
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“otherwise than under Part 3 of the Corporation Tax Act 2009”.
      (3)
In subsection (3)—
(a)
for “Case I of Schedule D” substitute “Part 3 of the Corporation Tax
Act 2009”, and
(b)
for the words from “under any other” to the end substitute
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“otherwise than under Part 3 of that Act”.
      (4)
In subsection (4) for “section 11(2)(a) or 208 of the Taxes Act 1988” substitute
“section 1285 of the Corporation Tax Act 2009 (exemption for UK company
distributions)”.
      (5)
In subsection (4A)—
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(a)
for “208 of the Taxes Act 1988” substitute “1285 of the Corporation
Tax Act 2009”, and
(b)
in paragraph (b)—
(i)
for “Case I of Schedule D” substitute “Part 3 of the
Corporation Tax Act 2009”, and
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(ii)
for “(and not under any other Schedule or any other Case of
Schedule D)” substitute “(and not under any other provision
of the Corporation Tax Acts)”.
393
In section 220(3) (accounting period in which certain profits or losses arise)
for “section 72 of the Taxes Act 1988” substitute “section 52 of the
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Corporation Tax Act 2009”.
394
In section 225(4) (stop-loss and quota share insurance) in the definition of
“apportioned part” for “section 72 of the Taxes Act 1988” substitute “section
52 of the Corporation Tax Act 2009”.
395
In section 226(3) (provisions which are not to apply) for “Schedule 26 to the
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Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
689

396
In section 229(1)(ca) (regulations) for sub-paragraph (ii) substitute—
“(ii)
arrangements involving repos (within the meaning
given by section 554(4) of the Corporation Tax Act
2009); or
(iii)
arrangements meeting the conditions in section 554(2)
5
of that Act (redemption arrangements);”.
397
Omit sections 249 and 250 (certain companies treated as non-resident).
398
In paragraph 20(1) of Schedule 24 (provisions relating to the Railways Act
1993), in the words after paragraph (b) omit the words from “the trade” to
“but”.
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Finance Act 1995 (c. 4)
399
The Finance Act 1995 is amended as follows.
400
In section 126(7A) (UK representatives of non-residents) omit paragraph (b)
and the “or” immediately before it.
401
In section 127(1) (persons not treated as UK representatives)—
15
(a)
in paragraph (ca)—
(i)
for “Chapter 5 of Part 2” substitute “section 47(6) or (7),
47A(5), 48B(1) or 49A(2)”, and
(ii)
for “the arrangements falling within that section” substitute
“the alternative finance arrangements in question”, and
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(b)
omit paragraph (cb).
Finance Act 1996 (c. 8)
402
The Finance Act 1996 is amended as follows.
403
Omit section 80 (taxation of loan relationships).
404
Omit section 81 (meaning of “loan relationship” etc).
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405
Omit section 82 (methods of bringing amounts into account).
406
Omit section 83 (non-trading deficit on loan relationships).
407
Omit section 84 (debits and credits brought into account).
408
Omit section 84A (exchange gains and losses from loan relationships).
409
Omit section 85A (computation in accordance with generally accepted
30
accounting practice).
410
Omit section 85B (amounts recognised in determining a company’s profit or
loss).
411
Omit section 85C (amounts not fully recognised for accounting purposes).
412
Omit section 87 (accounting method where parties have a connection).
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413
Omit section 87A (meaning of “control” in section 87).
414
Omit section 88 (exemption from section 87 in certain cases).
415
Omit section 88A (accounting method where rate of interest is reset).

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
690

416
Omit section 90A (change of accounting basis applicable to assets or
liabilities).
417
Omit section 91A (shares subject to outstanding third party obligations).
418
Omit section 91B (non-qualifying shares).
419
Omit section 91C (Condition 1 for section 91B(6)(b)).
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420
Omit section 91D (Condition 2 for section 91B(6)(b)).
421
Omit section 91E (Condition 3 for section 91B(6)(b)).
422
Omit section 91F (power to add, vary or remove Conditions for section
91B(6)(b)).
423
Omit section 91G (shares beginning or ceasing to be subject to section 91A or
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91B).
424
Omit section 91H (payments in return for capital contribution).
425
Omit section 91I (change of partnership shares).
426
Omit section 93C (creditor relationships and benefit derived by connected
persons).
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427
Omit section 94 (indexed gilt-edged securities).
428
Omit section 94A (loan relationships with embedded derivatives).
429
Omit section 94B (loan relationships treated differently by connected debtor
and creditor).
430
Omit section 95 (gilt strips).
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431
Omit section 96 (special rules for certain other gilts).
432
Omit section 97 (manufactured interest).
433
Omit section 98 (collective investment schemes).
434
Omit section 99 (insurance companies).
435
Omit section 100 (money debts etc not arising from the lending of money).
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436
Omit section 101 (financial instruments).
437
Omit section 103 (interpretation of Chapter).
438
In section 154 (FOTRA securities), omit subsections (2), (3), (5), (6) and (8).
439
In section 203(9) (modification of the Agriculture Act 1993) for “Chapter II of
Part IV of this Act” substitute “Part 5 of the Corporation Tax Act 2009 (loan
30
relationships)”.
440
Omit Schedule 8 (loan relationships: claims etc relating to deficits).
441
Omit Schedule 9 (loan relationships: special computational provisions).
442
Omit Schedule 10 (loan relationships: collective investment schemes).
443
Omit Schedule 11 (loan relationships: special provisions for insurers).
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