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
698

(b)
on the taking effect of that transfer, the transferee began to
carry on the trade.

This sub-paragraph is to be read with sub-paragraph (8).”
      (4)
In paragraph 17—
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
5
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.
      (5)
In paragraph 29—
10
(a)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
1996” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.
15
      (6)
In paragraph 35—
(a)
in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance
Act 1996” substitute “section 444 of the Corporation Tax Act 2009”,
and
(b)
in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act
20
1996” and “that Chapter” substitute “Part 5 of the Corporation Tax
Act 2009” and “that Part” respectively.
Capital Allowances Act 2001 (c. 2)
474
The Capital Allowances Act 2001 is amended as follows.
475
In section 2(4) (general means of giving effect to capital allowances) for
25
“section 6 of ICTA” substitute “Part 2 of CTA 2009 (see section 2(2) of that
Act)”.
476
In section 15(1)(f) (qualifying activities) for “section 55(2) of ICTA” substitute
“section 39(4) of CTA 2009”.
477
In section 16 (ordinary property business) omit “, or a Schedule A business,”.
30
478   (1)
Amend section 17 (furnished holiday lettings) as follows.
      (2)
In subsection (1) omit “, or a Schedule A business,”.
      (3)
In subsection (3), in the second sentence for “has the meaning given by
section 504 of ICTA” substitute “has the same meaning as it has for the
purposes of Chapter 6 of Part 4 of CTA 2009 (see section 265)”.
35
479   (1)
Amend section 18 (managing investments of a company with investment
business) as follows.
      (2)
In subsection (1) for “section 75 of ICTA” substitute “section 1219 of CTA
2009”.
      (3)
In subsection (2) for “section 130 of ICTA” substitute “section 1218 of CTA
40
2009”.
480
In section 28(2B)(a) (thermal insulation of buildings) for “section 31ZA of
ICTA” substitute “section 251 of CTA 2009”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
699

481
In section 38 (production animals etc) for paragraphs (a) and (b) substitute—
“(a)
animals or other creatures to which section 30 of ITTOIA 2005
or section 50 of CTA 2009 (animals kept for trade purposes)
applies,
(b)
animals or other creatures to which Chapter 8 of Part 2 of
5
ITTOIA 2005 or Chapter 8 of Part 3 of CTA 2009 (herd basis
rules) applies, or
(c)
shares in animals or creatures such as are mentioned in
paragraph (a) or (b).”
482   (1)
Amend section 63 (cases in which disposal value is nil) as follows.
10
      (2)
In subsection (2)(c) for “section 84 of ICTA” substitute “section 106 of CTA
2009”.
      (3)
In subsection (4) for “sections 83A(4) and 84(4) of ICTA” substitute “section
108 of CTA 2009”.
483
In section 105(3)(a) (“profits chargeable to tax”) for “section 830(4) of ICTA”
15
substitute “section 1313(2) of CTA 2009”.
484   (1)
Amend section 106 (the designated period) as follows.
      (2)
In subsection (3)(b) for the words from “each of which” to the end substitute
“each of which there was a change in the persons carrying on the qualifying
activity in relation to which Condition A or Condition B was met.”
20
      (3)
After subsection (3) insert—
“(3A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
25
(b)
at least one person who carried on the qualifying activity
before the change continued to carry it on after the change.
(3B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
30
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
35
485   (1)
Amend section 108 (effect of disposal to connected person on overseas
leasing pool) as follows.
      (2)
In subsection (1)(b) for the words from “is one” to “reconstructions)”
substitute “does not occur on the occasion of a change in the persons
carrying on the qualifying activity—
40
(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or
(ii)
in relation to which Condition A or Condition B is
met”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
700

      (3)
After subsection (1) insert—
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
5
(b)
at least one person who carried on the qualifying activity
before the change continued to carry it on after the change.
(1B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
10
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
15
486   (1)
Amend section 112 (excess allowances: connected persons) as follows.
      (2)
In subsection (1) for paragraph (b) and the “and” immediately after that
paragraph substitute—
“(b)
the transaction was not effected (or, if more than one, none of
the transactions was effected) on the occasion of a change in
20
the persons carrying on the qualifying activity—
(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or
(ii)
in relation to which Condition A or Condition B is
met, and”.
25
      (3)
After subsection (1) insert—
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
30
(b)
at least one person who carried on the qualifying activity
before the change continued to carry it on after the change.
(1B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
35
(b)
a company that was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
40
487   (1)
Amend section 115 (prohibited allowances: connected persons) as follows.
      (2)
In subsection (1) for paragraph (c) and the “and” immediately after that
paragraph substitute—
“(c)
the transaction was not effected (or, if more than one, none of
the transactions was effected) on the occasion of a change in
45
the persons carrying on the qualifying activity—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
701

(i)
which falls within section 343(1) of ICTA (company
reconstructions without change of ownership), or
(ii)
in relation to which Condition A or Condition B is
met, and”.
      (3)
After subsection (1) insert—
5
“(1A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
(b)
at least one person who carried on the qualifying activity
10
before the change continued to carry it on after the change.
(1B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company that was within the charge to corporation tax in
15
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
488   (1)
Amend section 122 (short-term leasing by buyer, lessee, etc) as follows.
20
      (2)
In subsection (2)(c) for the words from “on the occasion of each of which” to
the end substitute “on the occasion of each of which there was a change in
the persons carrying on the qualifying activity in relation to which
Condition A or B was met.”
      (3)
After subsection (2) insert—
25
“(2A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
(b)
at least one person who carried on the qualifying activity
30
before the change continued to carry it on after the change.
(2B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
(b)
a company that was within the charge to corporation tax in
35
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
489   (1)
Amend section 125 (other qualifying purposes) as follows.
40
      (2)
In subsection (3)(c) for the words from “on the occasion of each of which” to
the end substitute “on the occasion of each of which there was a change in
the persons carrying on the qualifying activity in relation to which
Condition A or B was met.”

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
702

      (3)
After subsection (3) insert—
“(3A)
Condition A is that—
(a)
at least one person who carried on the qualifying activity
immediately before or immediately after the change was
within the charge to income tax in respect of that activity, and
5
(b)
at least one person who carried on the qualifying activity
before the change continued to carry it on after the change.
(3B)
Condition B is that—
(a)
the qualifying activity was carried on in partnership both
immediately before and immediately after the change,
10
(b)
a company which was within the charge to corporation tax in
respect of the activity carried it on immediately before or
immediately after the change, and
(c)
at least one company which carried the activity on before the
change continued to carry it on after the change.”
15
490
In section 252 (mines, transport undertakings etc) for “section 55(2) of ICTA”
substitute “section 39(4) of CTA 2009”.
491   (1)
Amend section 253 (companies with investment business) as follows.
      (2)
In subsection (2) for “section 75(4) of ICTA” substitute “section 1233 of CTA
2009”.
20
      (3)
In subsection (4) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”.
      (4)
In subsection (6) for “section 75(4) of ICTA” substitute “section 1233 of CTA
2009”.
492   (1)
Amend section 256 (different giving effect rules for different categories of
business) as follows.
25
      (2)
In subsection (2)(b) for the words from “amount” to the end substitute
“company as receiving for the chargeable period in question an amount
which is equal to the amount of the charges (or parts of charges) and to
which the charge to corporation tax on income applies”.
      (3)
In subsection (4) for “under Case VI of Schedule D” substitute “chargeable
30
under section 436A of ICTA”.
493
In section 257(2)(a) (supplementary) for “Case I” substitute “life assurance
trade”.
494
In section 260(8) (special leasing: corporation tax (excess allowance)) for
“section 6 of ICTA (charge to corporation tax etc)” substitute “Part 2 of CTA
35
2009 (see section 2(2) of that Act)”.
495   (1)
Amend section 263 (qualifying activities carried on in partnership) as
follows.
      (2)
For subsection (1)(c) substitute—
“(c)
if the qualifying activity is a trade or property business, the
40
condition in subsection (1A) or (1B) (whichever is
appropriate) is met.”
      (3)
For subsection (1A) substitute—